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 $588,000 Utilities 42,000 Depreciation 70,000 Total $700,000 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 $660,000 77,000 February 631,000 70,000 March 602,000 63,000 The Machining Department supervisor has been very plened with this performance because actual expenditures for January March have been significantly less than the monthly static budget of 700,000. However, the plant manager believes that the budget should not remain fixed for every month but should "Rex" 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 Direct labor hours per unit Planned monthly unit production 54,000 0.5 a. Prepare a fexible budget for the actual units produced for January February, and March in the Machining Department. Assume depreciation is a fixed cost. 11 required, use per unit amounts carried out to two decimal places Niland Company Check My Work Plavious Next > Email Instructor Save and Exit Submit Assignment for Grading Niland Company Machining Department Budget For the Three Months Ending March 31 January February Units of production 77,000 70,000 March 63,000 Total Supporting calculations: Units of production Hours per unit 77,000 70,000 63,000 Total hours of production XS Wages per hour Total wages Total hours of production Utility costs per hour Total utilities b. Compare the le budget with the actual expenditures for the first three months. January February Total flexible budget March Actual cost 77,000 70,000 63,000 Total Supporting calculations: Units of production Hours per unit Total hours of production Wages per hour XS X $ Total wages Total hours of production Utility costs per hour Total utilities March b. Compare the flexible budget with the actual expenditures for the first three months. January February Total flexible budget Actual cost Excess of actual cost over budget What does this comparison sugo The Machining Department has performed better than originally thought. The department is spending more than would be expected. Check My Work P