Static budget versus fiexable budget The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: Hagerstown Company Machining Department \begin{tabular}{lr} \multicolumn{2}{c}{ Monthly Production Budget } \\ \hline Wages & $363,000 \\ Utilities: & 21,000 \\ Depreciation & 36,000 \\ \hline Total & $420,000 \\ \hline \end{tabular} The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: \begin{tabular}{lrc} & Amount Spent & Units Produced \\ \hline May & $397,000 & 98,000 \\ June & 378,000 & 89,000 \\ July & 360,000 & 80,000 \end{tabular} The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-luly have been significantly iess than the monthiy static budget of 420,000 . However, the plant manager believes that the budget should not remain fixed for every month but should "flex' or adjust to the volume of work that is produced in the Machining Department. Additional budget informatioo for the Machining Department is as follows: Weges per hour $17.00 Utility cost per direct labor hour $1.00 Direct labor hours per unit 0.20 Planned monthly unit production 106,000 a. Prepare a flexible budget for the actuel units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per. unit amounts carried out to two decimal places. b. Compare the flexible budget with the actual expenditures for the first three months. The Machining Department has performed better than originally thought. The department is spending more than would be expected