Flexible Budget for Assembly Department 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 $138,000 per month
Depreciation $17,000 per month
Direct labor rate $21 per hour
Prepare a flexible budget for 13,000, 16,000, and 20,000 filing cabinets for the month ending February 28 in the Assembly Department similar to Exhibit 5. Round your final answers to the whole dollar, if required.

Cabinaire Inc.

Assembly Department Budget

Month Ending March 31 (assumed data)

Units of production          10,000             13,000            15,000

Variable cost:

Direct labor                    $ 50,000        $ 65,000        $ 75,000

Total variable cost         $ 50,000        $ 65,000        $ 75,000

Fixed cost:

Supervisor salaries        $ 144,000        $ 144,000       $ 144,000

Depreciation                  $ 33,000         $ 33,000        $ 33,000

Total fixed cost              $ 177,000        $ 177,000        $ 177,000

Total department costs  $ 227,000     $ 242,000     $ 252,000

Explanation:

Direct Labor

10,000 Units = (15÷60) × 20 × 10,000 = $ 50,000

13,000 Units = (15÷60) × 20 × 13,000 = $ 65,000

15,000 Units = (15÷60) × 20 × 15,000 = $ 75,000