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 units produced in the first three months in the Hachioino pepartment were as follows: The Machining Department supervisor has been very pleased with thls peiformance beciuse bctual expunditures for May-july have been signiticantly lens than the monthly static budoet of 445,000. Howevec, the plant manager belleves that thit budoet should not remain fixed for every month but ahould "flex" or adjust to the. volume of work that is produced in the Machining Department. Additional budget information fer the Machinteg Department is as follows: 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 budoet of 445,000 . 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. Add tional budpet information for the Machining Department is as follows: a. Prepare a flecible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If recuired, use per unit amounts carried out to two decimal places. Hagerstown Company Machining Department Budget For the Three Months Ending July 31 \begin{tabular}{lllll} \hline Line Item Description & May & June & July \\ Units of production & Ma,000 \end{tabular} Supporting calculations: Units of production Hours per unit Total hours of production Wages per hour Total wages Total hours of production Utility costs per hour Total utilities 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