Question

1. 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	$123,000 per month
   Depreciation	$25,000 per month
   Direct labor rate	$18 per hour

   Prepare a flexible budget for 9,000, 11,000, and 14,000 filing cabinets for the month ending February 28 in the Assembly Department similar to Exhibit 5. Round your final answers to the whole dollar, if required.

   Cabinaire Inc.
   Assembly Department Budget
   For the Month Ending February 28 (assumed data)
   Units of production	9,000	11,000	14,000
   Variable cost:
   Depreciation Direct labor Supervisor salaries Rent Utilities	$	$	$
   Total variable cost	$	$	$
   Fixed cost:
   Direct labor Electric power Rent Supervisor salaries Wages	$	$	$
   Depreciation Direct labor Insurance Utilities Wages
   Total fixed cost	$	$	$
   Total department costs	$	$	$

Answer 1

Assembly Department Budget
For the Month Ending February 28 (assumed data)
Units of production	9000	11000	14000
Variable cost:
Direct labor	81000	99000	126000
Total variable cost	81000	99000	126000
Fixed cost:
Supervisor salaries	123000	123000	123000
Depreciation	25000	25000	25000
Total fixed cost	148000	148000	148000
Total department costs	229000	247000	274000
Workings:
Direct labor	=9000*0.5*18	=11000*0.5*18	=14000*0.5*18