year:Hagerstown CompanyMachining DepartmentMonthly Production BudgetLine Item DescriptionAmountWages$1,199,000Utilities65,000Depreciation109,000 Total$1,373,000The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:MonthAmount SpentUnits ProducedMay$1,294,000 100,000 June1,234,000 91,000 July1,177,000 82,000 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 1,373,000. 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:Line Item DescriptionAmountWages per hour$22.00Utility cost per direct labor hour$1.20Direct labor hours per unit0.50Planned monthly unit production109,000Question Content Areaa