Question

At the beginning of the period, the Assembly Department budgeted direct labor of $60,500 and property tax of $26,000 for 5,500 hours of production. The department actually completed 6,800 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting. $ fill in the blank 1

Answer 1

Total cost= $100,800

Step-by-step explanation:

Giving the following information:

Property tax= $26,000

Direct labor= $60,500

Number of hours= 5,500

Property tax is a fixed cost. We need to calculate the hourly rate for direct labor:

Hourly rate= 60,500 / 5,500

Hourly rate= $11

Now, the flexible budget:

Fixed cost= 26,00

Variable cost= 11*6,800= 74,800

Total cost= $100,800