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 $ 50,740 $ 49,740 $1,000 Favorable Direct labor 54,280 51,480 2,800 Favorable Indirect materials 25,960 26,260 300 Unfavorable Indirect labor 22,420 21,940 480 Favorable Utilities 14,750 14,580 170 Favorable Maintenance 5,900 6,120 220 Unfavorable Total variable 174,050 170,120 3,930 Favorable Fixed costs Rent 10,000 10,000 -O- Neither Favorable nor Unfavorable Supervision 18,200 18,200 -0- Neither Favorable nor Unfavorable Depreciation 5,200 5,200 -O- Neither Favorable nor Unfavorable Total fixed 33,400 33,400 -O- Neither Favorable nor Unfavorable Total costs $207,450 $ 203,520 $3,930 Favorable 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. (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 Diffe Fava Unfav Neither nor Unf Budget Actual Costs Units Variable Costs Direct Materials $ $ $ Direct Labor Indirect Materials Indirect Labor Utilities Maintenance Total Variable Costs Fixed Costs Rent Supervision Depreciation NNNN Total Fixed Costs Total Costs $