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 15 minutes Supervisor salaries $200,000 per month Depreciation $30,000 per month Direct labor rate $25 per hour Prepare a flexible budget for 25,000, 40,000, and 55,000 filing cabinets for the month of March in the Assembly Department, similar to Exhibit 5. Steelcase Inc.Assembly Department BudgetFor the Month Ending March 31 (assumed data) Units of production 25,000 40,000 55,000 Variable cost: $Direct labor $Direct labor $Direct labor Total variable cost $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 Fixed cost: $Supervisor salaries $Supervisor salaries $Supervisor salaries Depreciation Depreciation Depreciation Total fixed cost $fill in the blank 16 $fill in the blank 17 $fill in the blank 18 Total department costs $fill in the blank 19 $fill in the blank 20 $fill in the blank 21
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and 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 | 15 minutes |
| Supervisor salaries | $200,000 per month |
| $30,000 per month | |
| Direct labor rate | $25 per hour |
Prepare a flexible budget for 25,000, 40,000, and 55,000 filing cabinets for the month of March in the Assembly Department, similar to Exhibit 5.
Steelcase Inc.Assembly Department BudgetFor the Month Ending March 31 (assumed data)
| Units of production | 25,000 | 40,000 | 55,000 |
| Variable cost: | |||
|
|
$Direct labor | $Direct labor | $Direct labor |
| Total variable cost | $fill in the blank 5 | $fill in the blank 6 | $fill in the blank 7 |
| Fixed cost: | |||
|
|
$Supervisor salaries | $Supervisor salaries | $Supervisor salaries |
|
|
Depreciation | Depreciation | Depreciation |
| Total fixed cost | $fill in the blank 16 | $fill in the blank 17 | $fill in the blank 18 |
| Total department costs | $fill in the blank 19 | $fill in the blank 20 | $fill in the blank 21 |
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