Problem 10-3A (Part Level Submission) Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable Manufacturing Costs Budget Actual nor Unfavorable Varia e costs Direct materials $50,740 $49,740 $1,000 Favorable Direct abor 54 280 51,480 2,800 Favorable ndirect materials 25,960 26,260 300 Unfavorable ndirect labor 22,420 21,940 480 Favorable Util 14,750 14,580 170 Favorable Maintenance 5.900 6.120 220 Unfavorable Total variable 174,050 170,120 3.930 Favorable Fixed costs 10,000 10,000 0- N her Favorable nor Unfavorable Supervision 18,200 18,200 -0-Neither Favorable nor Unfavorable 0- Neither Favorable nor Unfavorable Depreciation 5 200 5 200 Total fixed 33 400 33 400 0- Neither Favorable nor Unfavorable Total costs S207.450$203 5203 .930Favorable The monthly budget amounts in the report were based on an expected production of 59,000 units per month or 708,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 57,000 units were produced