a$.$ Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation

is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Hagerstown Company

Machining Department Budget

For the Three Months Ending July $31$

b$.$ Compare the flexible budget with the actual expenditures for the first three months.

May

June

July

Total flexible budget

Actual cost

Excess of actual cost over budget

What does this comparison suggest?

The Machining Department has performed better than originally thought.

The department is spending more than would be expected.