Answer:
Total Flexible Budgets for 12,000, 15,000, and 18,000 units is<u> $ 556,000 $ 643,000 and $830,000 </u><u> </u>
Explanation:
<u>Steelcase Inc.</u>
<u>Assembly Department:</u>
Steel per filing cabinet ............................................. 55 pounds
Direct labor per filing cabinet ...................................... 20 minutes
Supervisor salaries ................................................ $180,000 per month
Depreciation ...................................................... $28,000 per month
Direct labor rate................................................... $21 per hour
Steel cost ......................................................... $0.40 per pound
<u>Steelcase Inc.</u>
<u>Flexible budget </u>
<u>For the month of August 2014.</u>
<u />
<u>Units:</u> 12000 15000 18000
Steel for filing cabinet 660,000 825000 990,000 pounds
Steel cost $264,000 330,000 $ 396,000
Direct labor Hrs 4,000 5,000 6,000
Direct labor Cost $84,000 $105,000 $ 126,000
Supervisor salaries $180,000 $180,000 $180,000
<u>Depreciation $28,000 $28,000 $28,000 </u>
<u> </u><u>Total $ 556,000 $ 643,000 $830,000 </u><u> </u>
First we find the Steel for filing cabinets in pounds . Then we multiply with the rate to find the steel cost.
Similarly we find the direct labor hours and then the direct labor cost.
We assume that the supervisor salaries and depreciation are fixed.
