Cabinaire Inc. is one of the largest manufacturers of office furniture in the Un
ID: 2573480 • Letter: C
Question
Cabinaire 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 30 minutes Supervisor salaries $141,000 per month Depreciation $23,000 per month Direct labor rate $24 per hour Prepare a flexible budget for 9,000, 11,000, and 14,000 filing cabinets for the month of March similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.
Explanation / Answer
Flexible Production Budget Units of production 9000 11000 14000 Variable cost: Direct labor 108000 132000 168000 Total variable cost 108000 132000 168000 Fixed cost: Supervisory salaries 141000 141000 141000 Depreciation 23000 23000 23000 Total fixed cost 164000 164000 164000 Total department cost 272000 296000 332000