Question

At the beginning of the period, the Cutting Department budgeted direct labor of $37,680 and supervisor salaries of $39,280 for 3,140 hours of production. The department actually completed 3,400 hours of production. Determine the budget for the department assuming that it uses flexible budgeting.

Answer 1

WORKING NOTES:
	CALCULATION OF DIRECT LABOR RATE PER HOURS
	Direct Labor =	$           37,680
	Divide By	"/" By
	Direct Labor Hours	3,140
	Direct Labor rate per hour	$                   12
SOLUTION :
	CALCULATION OF BUDGET OF 3,400 HOURS OF PRODUCTION
		Amount
	Direct Labor (3,400 Hrs X $ 12.00)	$           40,800
	Supervisor salary	$           39,280
	Total Budget	$           80,080
	ANSWER = $ 80,080