Difference Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance $50,020 $48,920 $1,100 Favorable 59,780 56,480 3,300 Favorable 24,400 24,700 300 Unfavorable 20,740 20,340 400 Favorable 15,250 15,130 120 Favorable 7,320 7,610 290 Unfavorable Total variable 177.510 173,180 4.330 Favorable Fixed costs Rent Supervision Depreciation 12,900 12,900 -0- Neither Favorable nor Unfavorable 17,500 17,500. -0- Neither Favorable nor Unfavorable 7,500 7,500 0- Neither Favorable nor Unfavorable 37,900 37,900 -0 Neither Favorable nor Unfavorable Total fixed Total costs $215,410 $211,080 $4,330 Favorable The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732,000 un per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job wel done. The company president, however, is unhappy with the results for August because only 59,000 units were produced. RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs