Sheffield Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows. SHEFFIELD COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Difference Favorable Manufacturing Costs Budget Actual 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- Supervision 17,600 17,600 -0- Depreciation 6,800 6,800 -0- Total fixed 36,900 36,900 -0- Total costs $230,820 $226,950 $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. SHEFFIELD COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Units 62000 62000 Variable Costs Direct Materials 54560 55320 760 Unfavorable Direct Labor 59520 58640 880|Favorable Indirect Materials 28520 29640 1120|Unfavorable Indirect Labor 21080 21330 250 Unfavorable Utilities 15500 15900 400 Unfavorable Maintenance 8680 9220 540 | Unfavorable Total Variable Costs 187860 190050 2190 Unfavorable Fixed Costs > Rent 12500 12500 0 Neither Favorable nor Unfavorable Supervision 17600 17600 0 Neither Favorable nor Unfavorable Depreciation 6800 6800 0 Neither Favorable nor Unfavorable Total Fixed Costs 36900 36900 0 Neither Favorable nor Unfavorable v Total Costs 224760 226950 2190 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.) SHEFFIELD COMPANY Assembling Department Flexible Budget Report For the Month Ended September 30, 2017 Difference Favorable Unfavorable Neither Favorable Budget Actual Costs nor Unfavorable > $ $ $ > > > A