Steelcase 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 12 minutes Supervisor salaries $150,000 per month Depreciation $24,500 per month Direct labor rate $22 per hour Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of August in the Assembly Department, similar to Exhibit 5.

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Jewel Wong

Business

8 April, 21:52

Steelcase 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 12 minutes Supervisor salaries $150,000 per month Depreciation $24,500 per month Direct labor rate $22 per hour Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of August in the Assembly Department, similar to Exhibit 5.

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Lutz · Answer 1

Prepare flexible production budget:

Units or production 18000 20000 22000

Variable cost:

Direct labor 79200 88000 96800

Total variable cost 79200 88000 96800

Fixed cost:

Supervisor salaries 150000 150000 150000

Depreciation 24500 24500 24500

Total fixed cost 174500 174500 174500

Total department cost 253700 262500 271300