Question 4

Culver Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows.

CULVERCOMPANY

Budget Report

Assembling Department

For the Month Ended August 31, 2017

Difference

Manufacturing Costs

Budget

Actual

Favorable

Unfavorable

Variable costsDirect materials$51,240

$50,140

$1,100

FavorableDirect labor59,780

56,580

3,200

FavorableIndirect materials25,620

25,820

200

UnfavorableIndirect labor21,960

21,560

400

FavorableUtilities18,300

18,170

130

FavorableMaintenance6,100

6,450

350

UnfavorableTotal variable183,000

178,720

4,280

FavorableFixed costsRent10,100

10,100

-0-

Supervision18,000

18,000

-0-

Depreciation6,200

6,200

-0-

Total fixed34,300

34,300

-0-

Total costs$217,300

$213,020

$4,280

Favorable

The monthly budget amounts in the report were based on an expected production of61,000units per month or732,000units 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 only59,000units were produced.

(a)

State the total monthly budgeted cost formula.(Round cost per unit to 2 decimal places, e.g. 1.25.)

The formula is $

+ variable costs of $

per unit.