Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows RATCHET COMPANY Budget Report For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance $53,760 $52,760 $1,000 Favorable 61,440 58,340 3,100 Favorable 25,600 25,700 100 Unfavorable 19,200 18,730 470 Favorable 22,400 22,240 160 Favorable 7,680 7,940 260 Unfavorable Total variable 190,080 185,710 4,370 Favorable Fixed costs Rent Supervision Depreciation 16,100 16,100 5,400 5,400 32,000 32,000 10,500 10,500 0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable Total fixed Total costs $222,080 $217,710 $4,370 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