Flexible budget for Assembly Department Steelcase 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 12 minutesSupervisor salaries $150,000 per monthDepreciation $24,500 per monthDirect labor rate $22 per hour Direct labor per filing cabinet 12 minutes Supervisor salaries $150,000 per month Depreciation $24,500 per month Direct labor rate $22 per hour Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month ofAugust in the Assembly Department, similar to Exhibit 5
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Flexible budget for Assembly Department Steelcase 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 12 minutes
Supervisor salaries $150,000 per month
Direct labor rate $22 per hour
| Direct labor per filing cabinet | 12 minutes |
| Supervisor salaries | $150,000 per month |
| Depreciation | $24,500 per month |
| Direct labor rate | $22 per hour |
Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of
August in the Assembly Department, similar to Exhibit 5
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