Question

Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Trim Assembly. Assume the following information for the Fabrication Department:

Steel per filing cabinet	41 pounds
Direct labor per filing cabinet	20 minutes
Supervisor salaries	$141,000 per month
Depreciation	$32,000 per month
Direct labor rate	$18 per hour
Steel cost	$1.52 per pound

Prepare a flexible budget for 15,000, 19,000, and 23,000 filing cabinets for the month of October 2016, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.

Cabinaire Inc-Fabrication Department
Flexible Production Budget
October 2016 (assumed data)
Units of production	15,000	19,000	23,000
Variable cost:
Direct labor	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3
Direct materials	fill in the blank 4	fill in the blank 5	fill in the blank 6
Total variable cost	$fill in the blank 7	$fill in the blank 8	$fill in the blank 9
Fixed cost:
Supervisor salaries	$fill in the blank 10	$fill in the blank 11	$fill in the blank 12
Depreciation	fill in the blank 13	fill in the blank 14	fill in the blank 15
Total fixed cost	$fill in the blank 16	$fill in the blank 17	$fill in the blank 18
Total department cost	$fill in the blank 19	$fill in the blank 20	$fill in the blank 21

Answer 1

Cabinaire Inc-Fabrication Department
Flexible Production Budget
October 2016 (assumed data)
Units of production	15,000	19,000	23,000
Variable cost:
Direct labor	90000	114000	138000
Direct materials	934800	1184080	1433360
Total variable cost	1024800	1298080	1571360
Fixed cost:
Supervisor salaries	141000	141000	141000
Depreciation	32000	32000	32000
Total fixed cost	173000	173000	173000
Total department cost	1197800	1471080	1744360

Workings:
Units of production	15,000	19,000	23,000
Variable cost:
Direct labor	=15000*(20/60)*18	=19000*(20/60)*18	=23000*(20/60)*18
Direct materials	=15000*41*1.52	=19000*41*1.52	=23000*41*1.52