# Flexible budgeting At the beginning of the period, the Assembly Department budgeted direct labor of $120,000 and property tax of$16,000 for 5,000 hours of production. The department actually completed 5,600 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 22, Problem 22.1APE
Textbook Problem

## Flexible budgetingAt the beginning of the period, the Assembly Department budgeted direct labor of $120,000 and property tax of$16,000 for 5,000 hours of production. The department actually completed 5,600 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.

Expert Solution
To determine

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

To Calculate: The budget for the department, assuming that it uses flexible budgeting.

### Explanation of Solution

Calculate the budget for the department.

 Flexible Budget Particulars Amount ($) Variable Cost: Â Â Â Â Â Direct Labor 134,400 (2) Fixed Cost: Â Â Â Â Â Â Property Tax 16,000 Total Department Costs 150,400 Table (1) Working Note: Calculate the direct labor cost per hour. Department budgeted direct labor =$120,000

Total production hours = 5,000

DirectÂ laborÂ costâ€‰=â€‰

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