The production supervisor of the Machining Department for Celtic Company agreed to the following monthly static budget for the upcoming year:

Celtic Company

Machining Department

Monthly Production Budget

Wages $579,000

Utilities 32,000

Depreciation 54,000

Total $665,000

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 $627,000 118,000 February 601,000 108,000 March 571,000 97,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for JanuaryMarch have been less than the monthly static budget of $665,000. 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 $18.00 Utility cost per direct labor hour $1.00 Direct labor hours per unit 0.25 Planned monthly unit production 129,000 Question Content Area a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Celtic Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February March Units of production fill in the blank 71c150f49f9301a_1 fill in the blank 71c150f49f9301a_2 fill in the blank 71c150f49f9301a_3 Wages $fill in the blank 71c150f49f9301a_4 $fill in the blank 71c150f49f9301a_5 $fill in the blank 71c150f49f9301a_6 Utilities fill in the blank 71c150f49f9301a_7 fill in the blank 71c150f49f9301a_8 fill in the blank 71c150f49f9301a_9 Depreciation fill in the blank 71c150f49f9301a_10 fill in the blank 71c150f49f9301a_11 fill in the blank 71c150f49f9301a_12 Total $fill in the blank 71c150f49f9301a_13 $fill in the blank 71c150f49f9301a_14 $fill in the blank 71c150f49f9301a_15 Question Content Area b. Compare the flexible budget with the actual expenditures for the first three months. January February March Actual cost $fill in the blank 01beb401107a03b_1 $fill in the blank 01beb401107a03b_2 $fill in the blank 01beb401107a03b_3 Total flexible budget fill in the blank 01beb401107a03b_4 fill in the blank 01beb401107a03b_5 fill in the blank 01beb401107a03b_6 Excess of actual cost over budget $fill in the blank 01beb401107a03b_7 $fill in the blank 01beb401107a03b_8 $fill in the blank 01beb401107a03b_9 What does this comparison suggest? The Machining Department has performed better than originally thought. The department is spending more than would be expected.