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. Utilities $1,293,000 74,000 Depreciation Total 124,000 $1,491,000 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 $1,406,000 February 1,343,000 March 1,283,000 113,000 103,000 93,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of 1,491,000. 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 $21 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of 1,491,000. 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 $21 Utility cost per direct labor hour $1.2 0.5 124,000 Direct labor hours per unit Planned monthly unit production 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 113,000 103,000 93,000 Wages 1.186.500 1.081.500 976.500 Utilities 135.600 X 123,600 X 111.600 X 7 Depreciation Total Supporting calculations: Units of production 113,000 103,000 93,000 Previous Next> wages Utilities Depreciation Total 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 x 1.186.500 V 1.081,500 976,500 V 135,600 X 123,600 X 111.600 X 113,000 103,000 93,000