Answer:
Variable cost:
Direct labor (7,300 hours × $19.00* per hour)……………………………………… $138,700
Fixed cost:
Property tax……………………………………………………………………………… 10,000
Total department costs…………………………………………………………………… $148,700
* $123,500 ÷ 6,500 hours
PE 22-1A Flexible budgeting
At the beginning of the period, the Assembly Department budgeted direct labor of $123,500 and property tax of $10,000 for 6,500 hours of production. The department actually completed 7,300 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
Answer:
Variable cost:
Direct labor (7,300 hours × $19.00* per hour)……………………………………… $138,700
Fixed cost:
Property tax……………………………………………………………………………… 10,000
Total department costs…………………………………………………………………… $148,700
* $123,500 ÷ 6,500 hours
Answer:
Variable cost:
Direct labor (7,300 hours × $19.00* per hour)……………………………………… $138,700
Fixed cost:
Property tax……………………………………………………………………………… 10,000
Total department costs…………………………………………………………………… $148,700
* $123,500 ÷ 6,500 hours