Static Budget versus Flexible 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 Monthly Production Budget Wages $402,000 Utilities 35,000 Depreciation 58,000 Total $495.000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced May $468,000 123,000 June 449,000 112,000 July 430,000 101,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 495,000. However, the plant manager believes that the budget should not remain fixed for every month but should "exor adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $15.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.20 Planned monthly unit production 134,000 a. Prepare a flexible budget for the actual 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 Hagerstown Company Machining Department Budget For the Three Months Ending July 31 May July Units of production 123,000 312,000 101,000 Wages June Utilities Depreciation 123,000 112,000 101,000 Total Supporting calculations Units of production Hours per unit Total hours of production Wages per hour KA Total Wages Total hours of production Unity costs per hour Total utilities