Static Budget vs. Flexible Budget The production supervisor of the Painting Department for Whitley Company agreed to the following monthly static budget for the upcoming year. WHITLEY COMPANY Painting Department Monthly Production Budget Wages $532.000 Utilities 37,000 Depreciation 61,000 Total $630,000 The actual amount spent and the actual units produced in the first three months in the Painting Department were as follows: Amount Spent Units Produced January 5594.000 122.000 February 568,000 111.000 March 100,000 542.000 The Painting Department supervisor has been very pleased with this performance since actual expenditures have been less than the monthly but However, the plant manager believes that the budget should not remained for every month bot shoulder stjust to the volume of one that VOUR The Painting Department supervisor has been very pleased with this performance, since actual expenditures have been less than the monthly budget. 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 Painting Department. Additional budget information for the Painting Department is as follows: Wages per hour $16.00 Utility cost per direct labor hour $1.10 Direct labor hours per unit 0.25 hrs. Planned unit production 133,000 units a. Prepare a flexible budget for the actual units produced for January February, and March in the Painting Department. Assume depreciation is a fired cost. Enter all amounts as positive numbers. If required, round per unit amounts to the nearest cent. WHITLEY COMPANY Painting Department For the Three Months Ending March 31 January February March Units of production 122.000 111,000 100,000 Wages Utilities Depreciation Total Wages Utilities Depreciation Total b. Compare the flexible budget with the actual expenditures for the first three months. January February March Actual cost Total flexible budget What does this comparison suggest? Has the painting Department performed better than originally thought? Is the department spending more than expected? Check My Work 10 more Check My Work uses remaining