Static budget versus Flexible Budget The production supervisor of the Machining Department for Hagerstown Compsny agreed to the following manthly static hudget for the upcoming year: The actual amount spent and the actual units peoduced in the first three months in the Machining Department were as f The Machining Department supervisor has been very pleased with this performance becatase actuat expenditures for May have been significantly less than the monthly static budget of 539,000 . However, the plant manager believes that the b: should not remain foxed for every month but should "flex" or adjust to the volume of work that is produced in the Machi Department. Additional budget information for the Machining Department is as follows: a. Prepare a flexible budget for the actuol units produced for May, fune, and fuly in the Machining Department, Assur 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. What does this comparison suggest? The Machining Department has performed better than originally thought The department is spending more than would be expected