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	20 minutes
Supervisor salaries	$123,000 per month
Depreciation	$24,000 per month
Direct labor rate	$21 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:
Direct labor	$	$	$
Total variable cost	$	$	$
Fixed cost:
Supervisor salaries	$	$	$
Depreciation
Total fixed cost	$	$	$
Total department costs	$	$	$

Answer 1

CABINAIRE INC
Assembly Department Budget
For the month ending march 31
	Flexible Budgets
Units of Production	14,000 units	18,000 units	21,000 units
Variable Costs:
Direct labor(Note)	$98,000	$1,26,000	$1,47,000
Total Variable costs	$98,000.00	$1,26,000.00	$1,47,000.00
Fixed Costs:
Supervisor Salary	$1,23,000	$1,23,000	$1,23,000
Depreciation	$24,000	$24,000	$24,000
Total Fixed Costs	$1,47,000	$1,47,000	$1,47,000
Total Department Cost	$2,45,000	$2,73,000	$2,94,000
Note:Direct labor cost =No. of units produced*20/60*Direct labor rate