At the beginning of the period the Sealing Department budget

At the beginning of the period, the Sealing Department budgeted direct labor of $82,000 and property tax of $52,000 for 4,100 hours of production. The department actually completed 5,200 hours of production.

Determine the budget for the department, assuming that it uses flexible budgeting.
$

Solution

The budget for the department assuming it uses flexible budgeting is

$82000 for 4100 hrs of production, for 5200 hrs of production direct labour would be 5200x82000/4100 = 5200x20 = $104000

The Budget for the department would be 104000+52000 = $156000