Question

1. At the beginning of the period, the Fabricating Department budgeted direct labor of $53,200 and equipment depreciation of $33,000 for 3,800 hours of production. The department actually completed 5,100 hours of production.

Determine the budget for the department, assuming that it uses flexible budgeting.
__________

2.

Pasadena Candle Inc. projected sales of 67,000 candles for January. The estimated January 1 inventory is 4,700 units, and the desired January 31 inventory is 7,000 units.

Prepare a production budget report in units for Pasadena Candle Inc. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Pasadena Candle Inc.
Production Budget
For the Month Ending January 31
Expected units to be sold
Desired ending inventory, January 31
Total units available
Estimated beginning inventory, January 1
Total units to be produced in January

Answer 1

1
Direct labor in flexible budget	71400	=53200/3800*5100
Equipment depreciation	33000
Budget for the department	104400
2
Pasadena Candle Inc.
Production Budget
For the Month Ending January 31
Expected units to be sold	67000
Desired ending inventory, January 31	7000
Total units available	74000
Estimated beginning inventory, January 1	-4700
Total units to be produced in January	69300