Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembing Department is as follows. RATCHET COMPANY Budget Report For the Month Ended August 31, 2017 Oifference Favorable Unfavorable Neither Favorable nor Unfavorable Costs Actual Variable costs Direct matals 47,200 $46,200 $1,000 Favorable Direct labor Indirect materials 23,600 23,700 100 Unfavorable Indirect labor Utilities 53,100 50,500 2,600 Favorable 17.700 17,300 400 Favorable 14,750 14,650 100 Favorable 0-6 00, 00 Unfavorable Total varable1 162,250 158,350 3,900 Favorable Fixed costs 10,000 10,000 0-Nether Favorable nor Unfavorable 16,000 16,000 0-Neither Favorable nor Unfavorable 5.0005.000Nether Favorable nor Unfavorable 31.00031.000Nther Favorable nor Unfavorable Rent Total fixcad3 Total costs $193.250 $189.350 $3.900 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