Question

Cabinaire 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	30 minutes
Supervisor salaries	$117,000 per month
Depreciation	$29,000 per month
Direct labor rate	$15 per hour

Prepare a flexible budget for 14,000, 18,000, and 21,000 filing cabinets for the month of March in the Assembly Department similar to Exhibit 5. Enter all amounts as positive numbers.

Cabinaire Inc.
Assembly Department Budget
Month Ending March 31 (assumed data)
Units of production	14,000	18,000	21,000
Variable cost:
	$	$	$
Total variable cost	$	$	$
Fixed cost:
	$	$	$
Total fixed cost	$	$	$
Total department costs	$	$	$

Answer 1

Cabinaire Inc.
Assembly Department Budget
Month Ending March 31 (assumed data)
Units of production	14,000	18,000	21,000
Variable costs
Direct labor	14,000*1/2*$15 = $105,000	18,000*1/2*$15 = $135,000	21,000*1/2*$15 = $157,500
Total variable cost	$                                   105,000	$                                   135,000	$                                   157,500
Fixed costs
Supervisor salary	$                                   117,000	$                                   117,000	$                                   117,000
Depreciation	$                                     29,000	$                                     29,000	$                                     29,000
Total fixed costs	$                                   146,000	$                                   146,000	$                                   146,000
Total departmental cost	$                                   251,000	$                                   281,000	$                                   303,500

You can reach me over comment box if you have any doubts. Please rate this answer