10. EX.22-04.ALGO (Algorithmic) Flexible Budget for Assembly Department Cabinair
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Question
10. EX.22-04.ALGO (Algorithmic) Flexible Budget for Assembly Department Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the following information for the Assembly Department: Direct labor per filing cabinet 20 minutes Supervisor salaries Depreciation Direct labor rate Prepare a flexible budget for 15,000, 19,000, and 23,000 filing cabinets for the month of August in the Assembly Department, similar to Exhibit 5. Assuming that inventories are not significant. Enter all amounts as positive numbers. $120,000 per month $21,000 per month $15 per hour CABINAIRE INC-ASSEMBLY DEPARTMENT Flexible Production Budget For the Month Ending August 31 (assumed data) Units of production Variable cost: Direct labor 15,000 19,000 23,000 Direct materials Total variable cost $ Fixed cost: Supervisor salaries Depreciation Total fixed cost Total department cost $Explanation / Answer
Per unit Direct Material Cost is not given, it is assumed to be $1 per unit
Direct labour cost per unit is 20/60 * 15 = $5
Fixed cost will remain same irrespective of change in number of units.
Units 15000 19000 23000 Direct Labour 15000 19000 23000 Direct Material 75000 95000 115000 Total Variable Cost 90000 114000 138000 Supervisor Salary 120000 120000 120000 Depreciation 21000 21000 21000 Total Fixed Cost 141000 141000 141000 Total Department Cost 231000 255000 279000Related Questions
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