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bagirrra123 [75]
2 years ago
5

At the beginning of the period, the Cutting Department budgeted direct labor of $46,300 and supervisor salaries of $37,200 for 4

,630 hours of production. The department actually completed 5,000 hours of production.
Mathematics
1 answer:
Korvikt [17]2 years ago
4 0

Answer:

$87200

Step-by-step explanation:

Here is the complete question:

At the beginning of the period, the Cutting Department budgeted direct labor of $46,300 and supervisor salaries of $37,200 for 4,630 hours of production. The department actually completed 5,000 hours of production.

Determine the budget of the department assuming that it uses flexible budgeting?

Given: Budget for direct labour= $46300

           Supervisor salaries= $37200

           Expected production hours= 4630 hours

           Completed production hours= 5000 hours

Now, we know that company budget include both fixed and variable cost.

∴ Direct labour cost is a variable cost and Supervisor salaries are fixed cost.

Using flexible budgeting for determining the budget of department, we will pro rate the direct labour cost on the basis of production hours.

Direct labour= Budget\times \frac{completed\ production\ hours}{expected\ production\ hours}

Direct labour= 46300\times \frac{5000}{4630}

∴ Direct labour= $50000

we know the department budget = Fixed cost+variable cost

∴ Department budget= \$ 37200+\$ 50000 = \$ 87200

∴ The department budget is $87200.

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