Question 21.1: At the beginning of the period, the Assembly Department budg...
At the beginning of the period, the Assembly Department budgeted direct labor of $45,000 and supervisor salaries of $30,000 for 5,000 hours of production. The department actually completed 6,000 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
Variable cost:
Direct labor (6,000 hours × $9* per hour) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,000
Fixed cost:
Supervisor salaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Total department costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{\underline{\$ \ 84,000}}
*$45,000/5,000 hours