Question

in the Machining Department. Assume depreciation is a fixed cost. B. Compare the flexible budget with the actual expenditures for the first three months. What does this comparison suggest? D=25/4 EX 21-4 Flexible budget for Assembly Department Obj. 2 ✓ Total department Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In cost at 25,000 units, Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the $386,250 following information for the Assembly Department: Direct labor per filing cabinet .... 15 minutes Supervisor salaries $200,000 per month OW ME HOW EXCEL TEMPLATE Depreciation..................... $30,000 per month Direct labor rate........ $25 per hour Prepare a flexible budget for 25,000, 40,000, and 55,000 filing cabinets for the month of March in the Assembly Department, similar to Exhibit 5.

Answer 1

	FLEXIBLE BUDGET FOR 25,000   , 40,000 AND 55,000 FILLING CABINETS
		25,000 Cabinates	40,000 Cabinates	55,000 Cabinates
	Direct Labor (Variable Expenses)	$1,56,250	$2,50,000	$3,43,750
		(25,000 X $ 6.25)	(40,000 X $ 6.25)	(55,000 X $ 6.25)
	Supervisor Salary (Fixed Expenses)	$2,00,000	$2,00,000	$2,00,000
	Dpreciation (Fixed Expenses)	$30,000	$30,000	$30,000
	Total	$3,86,250	$4,80,000	$5,73,750
Working Notes: Calculation of direct labor rate per Hrs
	Direct Labor Rate =	15 Minutes
	Direct Labor Rate =	0.25 Hrs
	Direct Labor Rate Per Hours ( $ 0.25 X $ 25)	$6.25