Flexible Budget for Fabrication Department

Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Assembly. Assume the following information for the Assembly Department:

Direct labor per filing cabinet	20 minutes
Supervisor salaries	$114,000 per month
Depreciation	$20,000 per month
Direct labor rate	$15 per hour

Prepare a flexible budget for 10,000, 13,000, and 15,000 filing cabinets for the month of August, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.

Steelcase Inc. - Assembly Department

Month Ending August 31

(Assumed Data)

Units of production

10,000

13,000

15,000

Variable cost: Direct labor Fixed cost: Supervisor salaries Depreciation Total fixed cost Total department cost