At the beginning of the period, the Assembly Department budgeted direct labor of

Question

At the beginning of the period, the Assembly Department budgeted direct labor of $186,000 and property tax of $15,000 for 12,000 hours of production. The department actually completed 13,400 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting. At the beginning of the period, the Assembly Department budgeted direct labor of $186,000 and property tax of $15,000 for 12,000 hours of production. The department actually completed 13,400 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.

Explanation / Answer

budgeted direct labour per hour = 186000 / 12000 = 15.5

actual hours labour cost = 13400 * 15.5= 207700

actual hours labour cost 207700+ property tax15000= 222700

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