Ch 8 Homework #1

The productian supervisor of the Machining Department for Hagerstowa Company agreed to the following monthly static budget for the upcoming Year: The actual amounk soem and the actual units prodoced in the fint three months in the Machining Department mern as foliowsi. The Machining Department supervisor has been very plased with this performance becouse actual expenstures for May-July hove been significantiy iess than the manthly static busget of 434,000 . Howevec, the plant marager beleves that the budget should noc remain fixed for every month but should thex" of adjust to the volume Cf work that is probuced in tho Machining Department. Additional budget information for the Machuring Department is as folisma. a. Prepare a fexible budget for the actuai units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts camied out to two decimal places. b. Compare the Hexble budget with the actual expenditures for the first three months. The Machining Decartment has performed better than originally thought. The department is spending more than would be expected