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, 2017
						Difference
		Budget		Actual Costs		Favorable Unfavorable Neither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs		$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsMaintenanceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnitsUtilitiesVariable Costs		$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable

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	$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	0	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.

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.)