Answer:
Variable cost:
Direct labor (600 hours × $14.50* per hour)………………………………………… $ 8,700
Fixed cost:
Equipment depreciation………………………………………………………………… 2,300
Total department costs…………………………………………………………………… $11,000
* $9,280 ÷ 640 hours
PE 22-1B Flexible budgeting
At the beginning of the period, the Fabricating Department budgeted direct labor of $9,280 and equipment depreciation of $2,300 for 640 hours of production. The department actually completed 600 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
Answer:
Variable cost:
Direct labor (600 hours × $14.50* per hour)………………………………………… $ 8,700
Fixed cost:
Equipment depreciation………………………………………………………………… 2,300
Total department costs…………………………………………………………………… $11,000
* $9,280 ÷ 640 hours
Answer:
Variable cost:
Direct labor (600 hours × $14.50* per hour)………………………………………… $ 8,700
Fixed cost:
Equipment depreciation………………………………………………………………… 2,300
Total department costs…………………………………………………………………… $11,000
* $9,280 ÷ 640 hours