The production supervisor of the Painting Department for Whitley Company agreed to the following monthly static budget for the upcoming year:
WHITLEY COMPANY
Painting Department
Monthly Production Budget
Wages $548,000
Utilities 40,000
Depreciation 67,000
Total $655,000
The actual amount spent and the actual units produced in the first three months in the Painting Department were as follows:
Amount Spent Units Produced
January $618,000 67,000 February 592,000 61,000 March 566,000 55,000 The Painting Department supervisor has been very pleased with this performance, since actual expenditures have been less than the monthly budget. 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 Painting Department. Additional budget information for the Painting Department is as follows:
Wages per hour $15.00
Utility cost per direct labor hour $1.10
Direct labor hours per unit 0.50 hrs.
Planned unit production 73,000 units
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Painting Department. Assume depreciation is a fixed cost. Enter all amounts as positive numbers. If
