Question

Flexible Budget for Fabrication Department

Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Trim Assembly. Assume the following information for the Fabrication Department:

Steel per filing cabinet	46 pounds
Direct labor per filing cabinet	30 minutes
Supervisor salaries	$117,000 per month
Depreciation	$22,000 per month
Direct labor rate	$18 per hour
Steel cost	$1.44 per pound

Prepare a flexible budget for 8,000, 10,000, and 12,000 filing cabinets for the month of October 2016, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.

Cabinaire Inc-Fabrication Department
Flexible Production Budget
October 2016 (assumed data)
Units of production	8,000	10,000	12,000
Variable cost:
Direct labor	$	$	$
Direct materials
Total variable cost	$	$	$
Fixed cost:
Supervisor salaries	$	$	$
Depreciation
Total fixed cost	$	$	$
Total department cost	$	$	$

Answer 1

Cabinaire Inc-Fabrication Department
Flexible Production Budget
October 2016 (assumed data)
Units of production	8,000	10,000	12,000
Variable cost:
Direct labor	72000	90000	108000
Direct materials	529920	662400	794880
Total variable cost	601920	752400	902880
Fixed cost:
Supervisor salaries	117000	117000	117000
Depreciation	22000	22000	22000
Total fixed cost	139000	139000	139000
Total department cost	740920	891400	1041880