$\backslash$table$[[$May$,$$$1,600,000,40,000],[$June$,1,950,000,48,000],[$July$,2,200,000,52,000]]$

The Machining Department supervisor has been very pleased with this performance because actual expenditures for May$-$July have been significantly less than the monthly static budget of $$2,358,000.$ 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 $$25\mathrm{.}00$

Utility cost per direct labor hour

$$0\mathrm{.}80$

Direct labor hours per unit

$1\mathrm{.}5$

Planned monthly unit production

$60,000$

a$.$ Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Hagerstown Company

Machining Department Budget

For the Three Months Ending July $31$

b$.$ Compare the flexible budget with the actual expenditures for the first three months.

May

June

July

Total flexible budget

Actual cost

Excess of actual cost over budget

$\backslash$table$[[$May$,$June,July$],[,$vdots,$],[$:$,,]]$

What does this comparison suggest?

The Machining Department has performed better than originally thought.

The department is spending more than would be expected.