Static Budget vs. Flexible Budget The production supervisor of the Machining Department for Rodriguez Company agreed to the following monthly static budget for the upcoming year: Rodriguez Company Machining Department Monthly Production Budget Wages Utilities $384,000 36,000 60,000 Depreciation Total $480,000 The actual amount spent and the actual units produced in the first three months of 2016 in the Machining Department were as follows: Amount Spent Units Produced January $400,000 440,000 90,000 100,000 February March 470,000 110,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January March have been less than the monthly static budget of $480,000. 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 $16.00 Utility cost per direct labor hour $1.50 Direct labor hours per unit 0.20 Planned monthly unit production 120,000 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. Enter all amounts as positive numbers. Rodriguez Company-Machining Department Flexible Production Budget For the Three Months Ending March 31, 2016 January February March Units of production 90,000 100,000 110,000 Wages Utilities Depreciation Total Supporting calculations: Units of production Hours per unit 90,000 100,000 110,000 Total hours of production Wages per hour Total wages Total hours of production Utility costs per hour Total utilities b. Compare the flexible budget with the actual expenditures for the first three months. Enter all amounts as positive numbers. 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. The department is spending more than would be expected