The preparation of a flexible budget for 4,000, 10,000, and 16,000 filing cabinets for the month of August, for Steelcase Inc. is as follows:
Steelcase Inc.
<h3>Assembly Department Budget</h3>
Month ending August 31
4,000 10,000 16,000
Variable costs:
Direct labor $24,000 $60,000 $96,000
Fixed Costs:
Supervisor salaries $108,000 $108,000 $108,000
Depreciation 6,500 6,500 6,500
Total fixed costs $114,500 $114,500 $114,500
Total department costs $138,500 $174,500 $210,500
<h3>What is a flexible budget?</h3>
A flexible budget adjusts the revenue and costs according to the activity level.
A flexible budget is the opposite of a static/planning budget, which does not change in accordance with the activity level.
In preparing a flexible budget, costs and revenues for different activity levels must be shown.
Direct labor per filing cabinet 20 minutes
Supervisor salaries $108,000 per month
Depreciation $6,500 per month
Direct labor rate $18 per hour
Direct labor cost per filing cabinet = $6 ($18/60 x 20)
<u>Direct labor costs at different activity levels</u>:
4,000 units = $24,000 ($6 x 4,000)
10,000 units = $60,000 ($6 x 10,000)
16,000 units = $96,000 ($6 x 16,000)
Learn more about flexible budgets at brainly.com/question/25353134
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