Static Budget versus Flexible Budget

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

Niland Company Machining Department Monthly Production Budget
Wages	$360,000
Utilities	33,000
Depreciation	56,000
Total	$449,000

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
January	$425,000		118,000
February	410,000		108,000
March	392,000		97,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for JanuaryMarch have been significantly less than the monthly static budget of 449,000. 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. Additional budget information for the Machining Department is as follows:

Wages per hour	$14
Utility cost per direct labor hour	$1.3
Direct labor hours per unit	0.2
Planned monthly unit production	129,000

Question Content Area

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company Machining Department Budget For the Three Months Ending March 31

	January	February	March
Units of production	118,000	108,000	97,000
AdvertisingRentResearch and developmentSuppliesWages	$- Select -	$- Select -	$- Select -
AdvertisingRentResearch and developmentSuppliesUtilities	- Select -	- Select -	- Select -
AdvertisingDepreciationRentResearch and developmentSupplies	- Select -	- Select -	- Select -
Total	$fill in the blank 1703df054f9f00b_13	$fill in the blank 1703df054f9f00b_14	$fill in the blank 1703df054f9f00b_15
Supporting calculations:
Units of production	118,000	108,000	97,000
Hours per unit	xfill in the blank 1703df054f9f00b_16	xfill in the blank 1703df054f9f00b_17	xfill in the blank 1703df054f9f00b_18
Total hours of production	fill in the blank 1703df054f9f00b_19	fill in the blank 1703df054f9f00b_20	fill in the blank 1703df054f9f00b_21
Wages per hour	x $fill in the blank 1703df054f9f00b_22	x $fill in the blank 1703df054f9f00b_23	x $fill in the blank 1703df054f9f00b_24
Total wages	$fill in the blank 1703df054f9f00b_25	$fill in the blank 1703df054f9f00b_26	$fill in the blank 1703df054f9f00b_27
Total hours of production	fill in the blank 1703df054f9f00b_28	fill in the blank 1703df054f9f00b_29	fill in the blank 1703df054f9f00b_30
Utility costs per hour	x $fill in the blank 1703df054f9f00b_31	x $fill in the blank 1703df054f9f00b_32	x $fill in the blank 1703df054f9f00b_33
Total utilities	$fill in the blank 1703df054f9f00b_34	$fill in the blank 1703df054f9f00b_35	$fill in the blank 1703df054f9f00b_36