Answer:
Fabricating Department
Flexible budget for the period:
Flexible Planned
Budget Budget Variance
Production hours 7,100 5,500 1,600 hours
Direct labor $127,800 $99,000 $28,800
Equipment depreciation 44,000 44,000 0
Total cost $171,800 $143,000 $28,800
Explanation:
a) Data and Calculations:
Budgeted direct labor = $99,000
Equipment depreciation = $44,000
Budgeted production hours = 5,500 hours
Actual production hours = 7,100 hours
Flexible Budget:
Direct labor = $99,000 * 7,100/5,500 = $127,800
Equipment depreciation = $44,000
Total cost = $171,800
