Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Manufacturing Costs Budget Actual nor Unfavorable Variable costs Direct materials $51,200 $50,200 $1,000 Favorable Direct labor 57,600 54,200 3.400 Favorable Indirect materials 26,880 26,980 100 Unfavorable Indirect labor 19,200 18,740 460 Favorable Utilities 16,000 15,830 170 Favorable Maintenance 11,520 11,780 260 Unfavorable Total variable 182,400 177,730 4,670 Favorable Fixed costs Rent 11,200 11,200 -0- Neither Favorable nor Unfavorable Supervision 18,300 18,300 -0- Neither Favorable nor Unfavorable Depreciation 7,400 7,400 -O- Neither Favorable nor Unfavorable Total fixed 36,900 36,900 -0- Neither Favorable nor Unfavorable Total costs $219,300 $214,630 $4.670 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) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Budget Actual Costs nor Unfavorable In September, 68,000 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 Assembling Department Flexible Budget Report For the Month Ended September 30, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs