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 |
50 pounds |
|
Direct labor per filing cabinet |
18 minutes |
|
Supervisor salaries |
$130,000 per month |
|
Depreciation |
$20,000 per month |
|
Direct labor rate |
$16 per hour |
|
Steel cost |
$1.25 per pound |
Prepare a flexible budget for 12,000, 15,000, and 18,000 filing cabinets for the month of October 2008, similar to Exhibit 5, assuming that inventories are not significant.