P23-3A State total budgeted cost formula and prepare flexible budget reports for 2 time periods Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows Your name: Ratchet Company Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable F Unfavorable U Actual Manufacturing Costs Budget Variable costs Direct materials $ 48,000 Direct labor 54,000 Indirect materials 24,000 Indirect labore 18,000 Utilities Maintenance 12,000 Total variable SS171,000 47,000 51,200 24,200 17,500 14.900 12,400 167 200 $1,000 F 2,800 F 200 U 500 F 100 F Indirect labor 15,000 15.000 400 U 3 ,800 F 12.000 12,000 Fixed costs Rent Supervision Depreciation Total fixed 17 000 17 UUU 17,000 6,000 35,000 AA 35000 Total costs $ 206,000 $ 202 200 $3,800 F The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise 023-3A 30 The monthly budget amounts in the report were based on an expected production of 60,000 units per month 31 or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, 32 or at least praise for a job well done. The company president, however, is unhappy with the results for August 33 because only 55,500 units were produced 35 Instructions 36 (a) State the total monthly budgeted cost formula 37 (b) Prepare a budget report for August using flexible budget data. Why does this report provide a better 38 basis for evaluating performance than the report based on static budget data? 19 (C) in September, 65,800 units were produced. Prepare the budget report using flexible budget data, assuming 10 (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August 12 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" State the total monthly budgeted cost formula. Fixed cost Value + variable cost of Value per unit 2. (b) Prepare a budget report for August using flexible budget data. Why does this report provide a better basis for evaluating performance than the report based on static budget data? RATCHET COMPANY Assembling department Flexible budget Report For the Month Ended August 31, 2020 Budget at 55,500 units Units Difference Variance Fav Amount Un Actual Costs 55,500 units ? Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance Total variable ? ? ? Value Value Value Value Value Value ? ? ? Fixed costs Rent Supervision 22.30 ? Value Value Value Value 2 Direct labor Indirect materials Indirect labor Utilities Maintenance Total variable 2 ? Value Value Value Value Value ? Fixed costs Rent Supervision Depreciation Total fixed Value Value Value Value Value Value Total costs Your comments on the department's performance for August! In September, 65,800 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August RATCHET COMPANY Assembling department Flexible budget Report For the Month Ended September 30, 2020 Budget at 65,800 units Actual Costs 65,800 units Difference V ariance Fav Amount Un Units 2 ? 2 Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance Total variable ? ? 2 ? ? 2 Fixed costs Rent Supervision Depreciation Total fixed Value Value Vale Value Value Value Value Value Value ? Total costs Your comments on the department's performance for September