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 Machining Department were as follows: Machining Department is as follows: places. Hagerstown Company Machining Department Budget For the Three Months Ending July 31 \begin{tabular}{|c|c|c|c|c|c|} \hline Line Item Description & & May & June & & July \\ \hline Units of production & & 121,000 & 110,000 & & 99,000 \\ \hline Wages & & 532,400 & $484,000 & $ & 435,600 \\ \hline Utilities & & 24,200 & 22,000 & & 19,800 \\ \hline Depreciation & & 57,000 & 57,000 & & 57,000 \\ \hline Total & & 613,600 & 563,000 & & 512,400 \\ \hline \multicolumn{6}{|l|}{ Supporting calculations: } \\ \hline Units of production & & 121,000 & 110,000 & & 99,000 \\ \hline Hours per unit & x[ & 0.20 & 0.20 & x & 0.20 \\ \hline Total hours of production & & 24,200 & 22,000 & & 19,800 \\ \hline Wages per hour & x$ & 22 & x$ & x$ & 22 \\ \hline Total wages & & 532,400 & $484,000 & $ & 435,600 \\ \hline Total hours of production & & 24,200 & 22,000 & & 19,800 \\ \hline Utility costs per hour & x$ & 1.30 & 1.30 & x$ & 1.30 \\ \hline Total utilities & & 24,200 & $22,000 & $ & 19,800 \\ \hline \end{tabular} b. Compare the flexible budget with the actual expenditures for the first three months. 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. The department is spending more than would be expected