The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year: Niland Company Machining Department Monthly Production Budget $296,000 13,000 22,000 $331,000 Wages Utilities Total 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 anuary February March $312,000 298,000 284,000 68,000 62,000 56,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of 331,000. 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 Utility cost per direct labor hour Direct labor hours per unit Planned monthly unit production $20 $0.9 0.2 74,000