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 F, UF or Neither

Manufacturing Costs Budget Actual

Variable costs

Direct materials $50,020 $48,920 $1,100 F

Direct labor 54,900 52,000 $ 2,900 F

Indirect materials 29,280 29,580 $300 UF

Indirect labor 20,740 20,290 $ 450 Favorable

Utilities 21,350 21,180 $170 Favorable

Maintenance 7,320 7,590 $270 Unfavorable

Total variable 183,610 179,560 $4,050 Favorable

Fixed costs

Rent 12,800 12,800 -0- Neither

Supervision 17,400 17,400 -0- Neither

Depreciation 7,500 7,500 -0- Neither

Total fixed 37,700 37,700 -0- Neither

Total costs $221,310 $217,260 $4,050 Favorable

The monthly budget amounts in the report were based on an expected production of61,000units per month or732,000units 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 only59,000units were produced.

In September,65,000units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was10% 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.)