At the beginning of the period, the Fabricating Department budgeted direct labor of $72,000 and equipment depreciation of $18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting. $

Question

Brayan Madden

Business

11 October, 17:07

At the beginning of the period, the Fabricating Department budgeted direct labor of $72,000 and equipment depreciation of $18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting. $

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Answers (1)

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Emilia Boyer · Answer 1

The flexible budget shows $ 70500 direct labor hours and $ 18114.58 Depreciation for 2350 hours.

Explanation:

Given

Actual hours 2,350

Budgeted Hours 2400

Budgeted Direct Labor $ 72,000

Budgeted Depreciation $ 18,500

Fabricating Department

Flexible Budget

Budgeted Flexible Difference

Hours 2400 2350

Direct Labor $ 72,000 70500 1500

Depreciation $ 18,500 18114.58 385.42

Total $ 90500 88,614.58 1885.42

Calculations

(72,000/2400) * 2350=70500

(18,500 / 2400) * 2350 = 18114.58

The flexible budget shows $ 70500 direct labor hours and $ 18114.58 Depreciation for 2350 hours.