GURLPRO on com. H Other Bookmarks Reading BOCA Show Me How State Budget verskeie Budget The production supervisor at the Machining Department for Hagerstown Company agreed to the fatowing monthly static budget for the upcoming years Hagerstown Company Machining Department Monthly Production Budget Wages 51,121,000 Utilities 59,000 Depreciation 99,000 Total $1,279,000 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 May $1,206,000 121,000 June 1,149,000 110,000 July 1,093,000 99,000 The Machining Department sopervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 1,229,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flexor 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 $17.00 Utility cost per direct labor hour $0.90 Direct labor hours per unit 0.50 Planned monthly unit production 132,000 a. Prepare a fexble budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fund 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 May June July Units of production 121,000 110,000 99,000 Total Supporting calculations: Units of production Hours per unit 121,000 110,000 99,000 Total hours of production X $ X XS Wages per hour Total wages Total hours of production Utility costs per hour Total utilities July b. Compare the flexible budget with the actual expenditures for the first three months. May June 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