E13-2 Static budget vs. flexible budget The production supervisor of the Machining Department for Lei Company agreed to the following monthly static budget for the upcoming year: LEI COMPANY Machining Department Monthly Production Budget Wages $1,440,000 Utilities 92,000 Depreciation 32,500 Total $1,564,500 Note: The spreadsheet icon indicates an Excel template is available on the student companion site. We've updated our read aloud Give it a try here. Aa C The Total Estimated Sales For Th X G The production supervisor of the x + 6068/4/4@0.00:0.00 Chapter 13 Budgeting and Standard Costs The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced January $1,200,000 75,000 February 1,356,000 85,000 March 1,425,000 90,000 The Machining Department supervisor has been very pleased with this performance, since actual expenditures have been less than the monthly budget. However, the plant manager believes that the budget should not remain fixed for every month but should "Alex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $18.00 Utility cost per direct labor hour $1.15 Direct labor hours per unit 0.80 hrs. Planned unit production 100,000 units a. Prepare a flexible budget for the actual units produced for January February, and March in the Machining Department. Assume depreciation is a fixed cost. b. Compare the flexible budget with the actual expenditures for the first three months. What does this comparison suggest? We've upd E13-3 Flexible budget for Fabrication Department &