Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the companys Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Difference Manufacturing Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable Variable costs Direct materials $56,320 $55,320 $1,000 Favorable Direct labor 61,440 58,640 2,800 Favorable Indirect materials 29,440 29,640 200 Unfavorable Indirect labor 21,760 21,330 430 Favorable Utilities 16,000 15,900 100 Favorable Maintenance 8,960 9,220 260 Unfavorable Total variable 193,920 190,050 3,870 Favorable Fixed costs Rent 12,500 12,500 0 Neither Favorable nor Unfavorable Supervision 17,600 17,600 0 Neither Favorable nor Unfavorable Depreciation 6,800 6,800 0 Neither Favorable nor Unfavorable Total fixed 36,900 36,900 0 Neither Favorable nor Unfavorable Total costs $230,820 $226,950 $3,870 Favorable

Problem 24-3A (Part Level Submission) 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 Unfavorable Neither Favorable Ma Variable costs Direct materials $56,320 $55,320 $1,000 Favorable Direct labor Indirect materials 29,440 29,640 200 Unfavorable Indirect labor Utilities 61,440 58,64O 2,800 Favorable 21,760 21,330 430 Favorable 16,000 15,900 100 Favorable 8,960 9,220 260 Unfavorable Total variable 193.920 190,050 3,870 Favorable Fixed costs 12,500 12,500 0-Neither Favorable nor Unfavorable 17,600 17,600Neither Favorable nor Unfavorable 6,800 6,800-0 Neither Favorable nor Unfavorable 36,900 36,900 Neither Favorable nor Unfavorable Total fixed Total costs $230,820 S226,950 $3,870 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. (a) &(b) Your answer is correct. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) 36,900variable costs of $ 3.03 per unit