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 Assembling Department 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 $48,380 $47,280 $1,100 Favorable 57,820 54,520 3,300 Favorable 25,960 26,060 100 Unfavorable 21,240 20,790 450 Favorable 20,650 20,510 140 Favorable 7,080 7,190 110 Unfavorable 181,130 176,350 4,780 Favorable Total variable Fixed costs Rent Supervision Depreciation -0-Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable : Neither Favorable nor Unfavorable 12,100 12,1000 19,000 19,000 7,300 7,300 38,400 38,400 Total fixed Total costs $219,530 $214,750 $4,780 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