Static budget versus flexible budget Hagerstown Company

Machining Department Budget

For the Three Months Ending July $31$

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For each level of production, show wages, utilities, and depreciation.

b$.$ Compare the flexible budget with the actual expenditures for the first three months.

Total flexible budget

May

June

July

Actual cost

Excess of actual cost over budget

What does this combarison suaaest?

The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:

$\backslash$table$[[\backslash$table$[[$Hagerstown Company$],[$Machining Department$],[$Monthly Production Budget$]]],[$Wages$,$$$376,000],[$Utilities$,28,000],[$Depreciation$,$$$46,000],[$Total$,$$$450,000]]$

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

$\backslash$table$[[,$Amount Spent,Units Produced$],[$May$,$$$425,000,115,000],[$June$,404,000,104,000],[$July$,387,000,94,000]]$

$\backslash$table$[[$Wages per hour,$$15\mathrm{.}00],[$Utility cost per direct labor hour,$$1\mathrm{.}10],[$Direct labor hours per unit,$0\mathrm{.}20],[$Planned monthly unit production,$125,000]]$

Hagerstown Company