Static Budget versus exible Budget The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year: Niland Company Machining Department Monthly Production Budget Wages Utilities Depreciation Total $1,125,000 90,000 50,000 $1,265,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: January February March Amount Spent $1,100,000 1,200,000 3,250,000 Units Produced 80,000 90,000 95,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of $1,265,000. However, the plent manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $15.00 tility co per direct labor hour Direct labor hours per un $1.20 0.75