Homework SourseFlexible Budget for Fabrication Department Steelcase Inc is
Flexible Budget for Fabrication Department
Steelcase 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 Assembly. Assume the following information for the Assembly Department:
Prepare a flexible budget for 8,000, 10,000, and 12,000 filing cabinets for the month of August, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.
| Direct labor per filing cabinet | 30 minutes |
| Supervisor salaries | $141,000 per month |
| Depreciation | $21,000 per month |
| Direct labor rate | $21 per hour |
Solution
Answers
Steelcase Inc. - Assembly Department
Month Ending August 31
(Assumed Data)
Units of production
8,000
10,000
12,000
Variable cost:
Direct Labor cost
$ 84,000.00 [8000 units x (30/60) hours x $21 per hour]
$ 1,05,000.00 [10,000 units x (30/60) hours x $21 per hour]
$ 1,26,000.00 [12,000 units x (30/60) hours x $21 per hour]
Fixed cost:
Supervisor Salaries
$ 1,41,000.00
$ 1,41,000.00
$ 1,41,000.00
Depreciation
$ 21,000.00
$ 21,000.00
$ 21,000.00
Total fixed cost
$ 1,62,000.00
$ 1,62,000.00
$ 1,62,000.00
Total department cost
$ 2,46,000.00
$ 2,67,000.00
$ 2,88,000.00
| Steelcase Inc. - Assembly Department | |||
| Month Ending August 31 | |||
| (Assumed Data) | |||
| Units of production | 8,000 | 10,000 | 12,000 |
| Variable cost: | |||
| Direct Labor cost | $ 84,000.00 [8000 units x (30/60) hours x $21 per hour] | $ 1,05,000.00 [10,000 units x (30/60) hours x $21 per hour] | $ 1,26,000.00 [12,000 units x (30/60) hours x $21 per hour] |
| Fixed cost: | |||
| Supervisor Salaries | $ 1,41,000.00 | $ 1,41,000.00 | $ 1,41,000.00 |
| Depreciation | $ 21,000.00 | $ 21,000.00 | $ 21,000.00 |
| Total fixed cost | $ 1,62,000.00 | $ 1,62,000.00 | $ 1,62,000.00 |
| Total department cost | $ 2,46,000.00 | $ 2,67,000.00 | $ 2,88,000.00 |
