# Flexible budget for Assembly Department 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. BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section Chapter 22, Problem 22.4EX Textbook Problem ## Flexible budget for Assembly Department 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.

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.

Production Budget shows the quantities of units that a company must produce to meet the budgeted sales and inventory.

To

Prepare: The flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of August.

### Explanation of Solution

The following table shows the flexible budget for 18,000, 20,000, and 22,000 filing cabinets.

 Company S Flexible Production Budget For The Month Ending August 31 Particulars Amount ($) Amount ($) Amount (\$) Units of Production 18,000 20,000 22,000 Variable Costs: Direct Labor 79,200(1) 88,000(2) 96,800(3) Total Variable Cost 79,200 88,000 96,800 Fixed Cost: Supervisor Salaries 150,000 150,000 150,000 Depreciation 24,500 24,500 24,500 Total Fixed Cost 174,500 174,500 174,500 Total Department Cost 253,700 262,500 271,300

Table (1)

Working Notes:

Calculate the direct labor for 18,000 units of production...

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