WATERWAY COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Problem 25-03A a, b1, c (Video) Waterway Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. WATERWAY COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Manufacturing Costs Budget Actual nor Unfavorable Variable costs Direct materials $53,760 $52,760 $1,000 Favorable Direct labor 62,720 59,620 3,100 Favorable Indirect materials 25,600 25,800 200 Unfavorable Indirect labor 20,480 20,020 460 Favorable Utilities 22,400 22,280 120 Favorable Maintenance 12.800 13,180 380 Unfavorable Total variable 197,760 193,660 4,100 Favorable Fixed costs Rent 10,800 10,800 -0-Neither Favorable nor Unfavorable Supervision 17,600 17,600 -- Neither Favorable nor Unfavorable Depreciation 5,700 5,700 -0- Neither Favorable nor Unfavorable Total fixed 34,100 34,100 -0- Neither Favorable nor Unfavorable Total costs 5231,860 $227,760 $4,100 Favorable The monthly budget amounts in the report were based on an expected production of 64,000 units per month or 768,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 62,000 units were produced