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I need help with the below static budget versus flexible budget, thanks!

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b. Compare the flexible budget with the actual expenditures for the first three months. January February Total flexible budget $:] $:
Excess of actual cost over budget $:] $:] What does this comparison suggest? March The Machining Department has performed better than originally thought. N0 J
The department is spending more than would be expected. Yes V/


a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If
required, use per unit amounts carried out to two decimal places.
Niland Company
Machining Department Budget
For the Three Months Ending March 31
Units of production
Supporting calculations:
Units of production
Hours per unit
Total hours of production
Wages per hour
X $
X $
X $
Total wages
Total hours of production
Utility costs per hour
x $
X $
x $
Total utilities


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 Wages $1,055,000
Utilities 48,000
Depreciation 80,000 Total $1,183,000 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 January $1,114,000 88,000
February 1,060,000 80,000
March 1,008,000 72,000 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 1,183,000. 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 $22
Utility cost per direct labor hour $1
Direct labor hours per unit 0.5 Planned monthly unit production 96,000

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