PLEASE use exact table posted below. Thank you!

Part A: Flexible Budget

Part B: Decision Analysis

Instructions

Static Budget vs. Flexible Budget

The production supervisor of the Machining Department for Rodriguez Company agreed to the following monthly static budget for the upcoming year:

Rodriguez Company Machining Department Monthly Production Budget
Wages	$384,000
Utilities	36,000
Depreciation	60,000
Total	$480,000

The actual amount spent and the actual units produced in the first three months of 2016 in the Machining Department were as follows:

	Amount Spent		Units Produced
January	$400,000		90,000
February	440,000		100,000
March	470,000		110,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for JanuaryMarch have been less than the monthly static budget of $480,000. However, the plant manager believes that the budget should not remain fixed for every month but should flex 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	$16.00
Utility cost per direct labor hour	$1.50
Direct labor hours per unit	0.20
Planned monthly unit production	120,000

Part A: Flexible Budget

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. If required, use per unit amounts carried out to two decimal places. Enter all amounts as positive numbers.

Rodriguez Company-Machining Department
Flexible Production Budget
For the Three Months Ending March 31, 2016
	January	February	March
Units of production	90,000	100,000	110,000
Wages	$	$	$
Utilities
Depreciation
Total	$	$	$
Supporting calculations:
Units of production	90,000	100,000	110,000
Hours per unit	x	x	x
Total hours of production
Wages per hour	x $	x $	x $
Total wages	$	$	$
Total hours of production
Utility costs per hour	x $	x $	x $
Total utilities	$	$	$

Part B: Decision Analysis

b. Compare the flexible budget with the actual expenditures for the first three months. Enter all amounts as positive numbers.

	January	February	March
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.

Check My Work2 more Check My Work uses remaining.

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