RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget _Actual Variable costs Direct materials $53,760 $52,760 $1,000 Favorable Direct labor Indirect materials 29,440 29,640 200 Unfavorable Indirect labor Utilities Maintenance 61,440 58,240 3,200 Favorable 21,760 21,310 450 Favorable 22,400 22,200 200 Favorable 11,520 11,780 260 Unfavorable Total variable 200,320 195,930 4,390 Favorable Fixed costs Rent Supervision Depreciation 10,800 10,800 0- Neither Favorable nor Unfavorable 18,600 18,600 0- Neither Favorable nor Unfavorable 5,500 5,500 0- Neither Favorable nor Unfavorable 34,900 34,900 0- Neither Favorable nor Unfavorable Total fixed Total costs S235,220 $230,830 $4,390 Favorable The monthly budget amounts in the report were based on an expected production of 64,000 units per month or 768,000 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 62,000 units were produced. (a) & (b) (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) + variable costs of $ per unit. RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2017 Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs