Problem 22-3A (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 Variable costs Direct materials $51,240 $50,140 $1,100 Favorable Direct labor 59,780 56,580 3,200 Favorable Indirect materials 25,620 25,820 200 Unfavorable Indirect labor 21,960 21,560 400 Favorable Utilities 18,300 18,170 130 Favorable Maintenance 6,100 6,450 350 Unfavorable Total variable 183,000 178,720 4,280 Favorable Fixed costs Rent 10,100 10,100 -- Neither Favorable nor Unfavorable Supervision 18,000 18,000 -- Neither Favorable nor Unfavorable Depreciation Total fixed 6,200 6,200 -- Neither Favorable nor Unfavorable 34,300 34,300 -- Neither Favorable nor Unfavorable $217,300 $213,020 $4,200 Favorable Total costs The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732,000 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 59,000 units were produced (a) (b) (a) State the total monthly budgeted cost formula (Round cost per unit to 2 decimal places, e.. 1.25.) The formula is + variable costs of $ per unit (b) Prepare a budget report for August using flexible budget data (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2017 Difference Budget Unfavorable Neither Favorable nor Unfavorable Actual Costs (b) Prepare a budget report for August using flexible budget data (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs