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At the beginning of the period, the Fabricating Department budgeted direct labor of $72,000 and equipment depreciation of $18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting. $

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akiran007

Answer:

The flexible budget shows $ 70500 direct labor hours and $ 18114.58 Depreciation for 2350 hours.

Explanation:

Given

Actual hours 2,350

Budgeted Hours 2400

Budgeted Direct Labor $ 72,000

Budgeted Depreciation $ 18,500

Fabricating Department

Flexible Budget

                         Budgeted                  Flexible         Difference

Hours                   2400                         2350            

Direct Labor      $ 72,000                  70500               1500  

Depreciation      $ 18,500                   18114.58          385.42

Total                     $ 90500                   88,614.58        1885.42  

Calculations

(72,000/2400)*2350=70500

(18,500 /2400)*2350= 18114.58    

The flexible budget shows $ 70500 direct labor hours and $ 18114.58 Depreciation for 2350 hours.