Question

6. Rodger's Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July: Direct materials Direct labor Electric power (variable) Electric power (fixed) Supervisor salaries Property taxes on factory Straight-line depreciation $8 per unit $5 per unit $0.30 per unit $4,000 per month $25,000 per month $4,000 per month $2,900 per month Prepare a flexible budget for Rodger's based on production of 10,000, 15,000, and 20,000

Answer 1

		Variable Cost	Unit Levels of Activity
Cost Item		Per Unit	10,000units	15,000units	20,000units
Direct Materials(per unit* no. of units)		$8.00	$80,000	$120,000	$160,000
Direct Labor(per unit* no. of units)		$5.00	50,000	75,000	100,000
Variable Factory Overhead
Power(per unit* no. of units)		$0.30	3,000	4,500	6,000
Total Variable Costs		$13.30	$133,000	$199,500	$266,000
Fixed Factory Overhead
Supervisory Salaries			$25,000	$25,000	$25,000
Depreciation			2,900	2,900	2,900
Power			4,000	4,000	4,000
Property Taxes			4,000	4,000	4,000
Total Fixed Costs			$35,900	$35,900	$35,900
Total Costs			$168,900	$235,400	$301,900