Question

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is

Answer 1

Answer:

Assembly Department

The appropriate total budget for the department, under flexible budgeting is:

$335,500.

Explanation:

a) Data and Calculations:

Estimated Direct labor = $110,000

Estimated Direct materials = $170,000

Estimated Fixed factory overhead = $28,000

Total budget = $308,000

Estimated Production hours = 8,000

Actual Production hours = 10,000

Based on flexible budget,

The Direct labor = $137,500 ($110,000 * 10,000/8,000)

Direct materials = $170,000

Fixed overhead =  $28,000

Total budget =    $335,500