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Venetian Company has two production departments, Fabricating and Assembling. At a department managers meeting, the...

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Accounting

Venetian Company has two production departments, Fabricating and Assembling. At a department managers meeting, the controller uses flexible budget graphs to explain total budgeted costs. Separate graphs based on direct labor hours are used for each department. The graphs show the following. 1. At zero direct labor hours, the total budgeted cost line and the fixed cost line intersect the vertical axis at $45,000 in the Fabricating Department and $35,000 in the Assembling Department. 2. At normal capacity of 45,000 direct labor hours, the line drawn from the total budgeted cost line intersects the vertical axis at $121,500 in the Fabricating Department, and $84,500 in the Assembling Department.

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