Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the companys Assembling Department is as follows.

In September, 65,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10 % higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs.)

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 $50,020 $48,920 $1,100 Favorable 59,780 56,480 3,300Favorable 24,400 24,700 300Unfavorable 20,740 20,340 400Favorable 15,250 15,130 120Favorable 7,320 7,610 290 Unfavorable Total variable 177,510 173,180 4,330 Favorable Fixed costs Rent Supervision Depreciation 12,900 12,900 0 Neither Favorable nor Unfavorable 17,500 17,500 0 Neither Favorable nor Unfavorable 7,500 7,500 -0- Neither Favorable nor Unfavorable 37,900 37,900 -0-Neither Favorable nor Unfavorable Total fixed $215,410 $211,080 S4,330 Favorable Total costs 5215,410 5211,080 54,330 The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732,000 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 59,000 units were produced