Question

Steelcase 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 12 minutes Supervisor salaries $150,000 per month Depreciation $24,500 per month Direct labor rate $22 per hour Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of August in the Assembly Department, similar to Exhibit 5.

Answer 1

Answer:

Explanation:

Prepare flexible production budget :

Units or production                18000       20000      22000

Variable cost:    

Direct labor                                 79200       88000      96800

Total variable cost                         79200       88000      96800

Fixed cost:    

Supervisor salaries                 150000       150000      150000

Depreciation                                  24500          24500       24500

Total fixed cost                          174500       174500         174500

Total department cost                  253700       262500         271300