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

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

information for the Machining Department is as follows:

Wages per hour

Utility cost per direct labor hour $,$$$17\mathrm{.}00$

Direct labor hours per unit $,0\mathrm{.}20$

Planned monthly unit production $,67,000$

Hagerstown Company

Hagerstown Company Machining Department Budget

For the Three Months Ending July $31$

$\backslash$table$[[$Line Item Description,May,June,July$]]$

Units of production

Wages

Depreciation

Total

Supporting calculations:

Units of production

Hours per unit

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.

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