Question

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct material of $170,000 and fixed costs of $28,000 for 7,000 hours of production. The department actually completed 8,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.

Question 23 options:

	$320,000
	$378,000
	$352,000
	$348,000

Answer 1

Answer- 23)- The appropriate total budget for the department using flexible budgeting = $348000.

Explanation- Total budget amount on 8000 hours of production =Direct labor+ Direct materials+ fixed costs

= {($110000+$170000)/7000 hours}*8000 hours+$28000

= $320000+$28000

= $348000