ACCOUNTING
Warren, Reeve and Duchac
Financial Accounting
Managerial Accounting
Carl Warren, James M. Reeve, Jonathan E. Duchac
Chapter 22
EX 22-4 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 Trim Assembly. Assume the following information for the Fabrication Department:
Steel per filing cabinet . . . . . . . . . . . . . . 45 pounds
Direct labor per filing cabinet . . . . . . . . . 20 minutes
Supervisor salaries . . . . . . . . . . . . . . . . . $140,000 per month
Depreciation . . . . . . . . . . . . . . . . . . . . . . $22,000 per month
Direct labor rate . . . . . . . . . . . . . . . . . . . $21 per hour
Steel cost . . . . . . . . . . . . . . . . . . . . . . . . $1.45 per pound
Prepare a flexible budget for 12,000,15,000,and 18,000 filing cabinets for the month of October 2010, similar to Exhibit 5, assuming that inventories are not significant.
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