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	30 minutes
Supervisor salaries	$132,000 per month
Depreciation	$22,000 per month
Direct labor rate	$12 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:
Direct labor	$	$	$
Total variable cost	$	$	$
Fixed cost:
Supervisor salaries	$	$	$
Depreciation
Total fixed cost	$	$	$
Total department costs	$	$	$

Answer 1

Ans:

	Flexible Production Budget
Units of production	9000	11000	14000
Variable cost:
Direct labor	54000	66000	84000
Total variable cost	54000	66000	84000
Fixed cost:
Supervisory salaries	132000	132000	132000
Depreciation	22000	22000	22000
Total fixed cost	154000	154000	154000
Total department cost	208000	220000	238000

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