RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials $ 52,460 $ 51,460 $1,000 Favorable Direct labor 57,340 53,940 3,400 Favorable Indirect materials 26,840 27,140 300 Unfavorable Indirect labor 18,300 17,890 410 Favorable 190 Favorable Utilities 15,250 15,060 Maintenance 6,100 6,350 250 Unfavorable Total variable 176,290 171,840 4,450 Favorable Fixed costs Rent 11,000 11,000 -0- Neither Favorable nor Unfavorable Supervision 18,000 18,000 -0- Neither Favorable nor Unfavorable Depreciation 7,900 7.900 -0- Neither Favorable nor Unfavorable Total fixed 36,900 36,900 -0- Neither Favorable nor Unfavorable $ 213,190 $ 208,740 $4,450 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 araise, 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, eg. 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, 2020 Dif Fai Unfa Neithel nor UI Budget Actual Costs Units Variable Costs Direct Materials