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Problem 22-3A (Part Level Submission) Ratchet Company uses budgets in controlling costs. The August 2017 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report For the Month Ended August 31, 2017 Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials 53,760 $52,760 $1,000 Favorable Direct labor Indirect materials 29,440 29,640 200 Unfavorable Indirect labor Utilities 61,440 58,240 3,200 Favorable 21,760 21,310 450 Favorable 22,400 22,200 200 Favorable 11,520 11,780 260 Unfavorable Total variable 200,320 195,930 4,390 Favorable Fixed costs Rent 10,800 18,600 5,500 34,900 10,800 18,600 5,500 34,900 -0-Neither Favorable nor Unfavorable -0-Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0-Neither Favorable nor Unfavorable Total fixed Total costs $235,220 $230,830 $4,390 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 (a) & (b) (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY lexible Budget Report For the Month Ended August 31, 2017 Unfavorable Neither Favorable Budget Actual Costs Attempts: 0 of 15 used

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