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

Hagerstown Company Machining Department Monthly Production Budget
Wages	$601,000
Utilities	26,000
Depreciation	43,000
Total	$670,000

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
May	$630,000		105,000
June	597,000		95,000
July	570,000		86,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for MayJuly have been significantly less than the monthly static budget of 670,000. 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	$21.00
Utility cost per direct labor hour	$0.90
Direct labor hours per unit	0.25
Planned monthly unit production	114,000

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

	May	June	July
Units of production	105,000	95,000	86,000
AdvertisingRentResearch and developmentSuppliesWagesWages	$Wages	$Wages	$Wages
AdvertisingRentResearch and developmentSuppliesUtilitiesUtilities	Utilities	Utilities	Utilities
AdvertisingDepreciationRentResearch and developmentSuppliesDepreciation	Depreciation	Depreciation	Depreciation
Total	$fill in the blank d710dff48fe9fd9_13	$fill in the blank d710dff48fe9fd9_14	$fill in the blank d710dff48fe9fd9_15
Supporting calculations:
Units of production	105,000	95,000	86,000
Hours per unit	x fill in the blank d710dff48fe9fd9_16	x fill in the blank d710dff48fe9fd9_17	x fill in the blank d710dff48fe9fd9_18
Total hours of production	fill in the blank d710dff48fe9fd9_19	fill in the blank d710dff48fe9fd9_20	fill in the blank d710dff48fe9fd9_21
Wages per hour	x $fill in the blank d710dff48fe9fd9_22	x $fill in the blank d710dff48fe9fd9_23	x $fill in the blank d710dff48fe9fd9_24
Total wages	$fill in the blank d710dff48fe9fd9_25	$fill in the blank d710dff48fe9fd9_26	$fill in the blank d710dff48fe9fd9_27
Total hours of production	fill in the blank d710dff48fe9fd9_28	fill in the blank d710dff48fe9fd9_29	fill in the blank d710dff48fe9fd9_30
Utility costs per hour	x $fill in the blank d710dff48fe9fd9_31	x $fill in the blank d710dff48fe9fd9_32	x $fill in the blank d710dff48fe9fd9_33
Total utilities	$fill in the blank d710dff48fe9fd9_34	$fill in the blank d710dff48fe9fd9_35	$fill in the blank d710dff48fe9fd9_36

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

	May	June	July
Total flexible budget	$fill in the blank 5cf8f1003f8407c_1	$fill in the blank 5cf8f1003f8407c_2	$fill in the blank 5cf8f1003f8407c_3
Actual cost	fill in the blank 5cf8f1003f8407c_4	fill in the blank 5cf8f1003f8407c_5	fill in the blank 5cf8f1003f8407c_6
Excess of actual cost over budget	$fill in the blank 5cf8f1003f8407c_7	$fill in the blank 5cf8f1003f8407c_8	$fill in the blank 5cf8f1003f8407c_9