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	20 minutes
Supervisor salaries	$114,000 per month
Depreciation	$29,000 per month
Direct labor rate	$15 per hour

Prepare a flexible budget for 10,000, 13,000, and 15,000 filing cabinets for the month of August in the Assembly Department, similar to Exhibit 5. Assuming that inventories are not significant. Enter all amounts as positive numbers.

CABINAIRE INC-ASSEMBLY DEPARTMENT
Flexible Production Budget
For the Month Ending August 31 (assumed data)
Units of production	10,000	13,000	15,000
Variable cost:
Direct labor	$	$	$
Total variable cost	$	$	$
Fixed cost:
Supervisor salaries	$	$	$
Depreciation
Total fixed cost	$	$	$
Total department cost	$	$	$

Answer 1

CABINAIRE INC-ASSEMBLY DEPARTMENT
Flexible Production Budgets
For the month ended August 31
Flexible Budget
	10,000 units	13,000 units	15,000 units
Variable Costs:
Direct labor	$50,000	$65,000	$75,000
Total Variable costs	$50,000	$65,000	$75,000
Fixed Costs:
Supervisor Salary	$1,14,000	$1,14,000	$1,14,000
Depreciation	$29,000	$29,000	$29,000
Total Fixed Costs	$1,43,000	$1,43,000	$1,43,000
Total Department Costs	$1,93,000	$2,08,000	$2,18,000