Static Budget versus Flexible Budget The production supervisor of the Machining Department for Nifand Company agreed to the following monthly static budget for the upcoming year: Niland Company Machining Department Monthly Production Budget Wages Utilities Depreciation $244,000 20,000 33,000 $297,000 Total 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 $281,000 70,000 February 266,000 63,000 March 256,000 57,000 $16.00 $1.30 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January March have been less than monthly static budget or $297,000. However, the plant manager believes that the budget should not rernain fixed for every month but should "flex" or ad 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 Utility cost per direct labor hour Direct: labor hours per unit 0.20 Planned monthly unit production 76,000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that deprecation is a cast. Enter all amounts os positive numbers. It required, use per unit amounts carried out to two decimal places. Nliand Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February Units of production March Wages Utilities Depreciation Total b. Compare the flexible budget with the actual expenditures for the first three months. January February March Total flexible budget Actual cost Excess of actual cost over budget What does this comparison suggest? The Machining Department has performed better than originally thought. Yes The department is spending more than would be expected. No