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: The actual amount spent and the actual urits produced in the first three months in the Machining Department were as follows: The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-3uly have been signiificantly less than the monthly static budget of 493,000 . However, the plant manager believes that the tudget should not remain fixed for every month but should "Mex" or adjust to the volume or work that is produced in the Machining Department. Additional busget information fot the Mactining Departrient is as follows: a. Prepare a flexible buidget 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. b. Compare the flexible budget with the actual expenditures for the first three manths