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Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the companys Assembling Department is as follows.

RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020
			Difference
Manufacturing Costs	Budget	Actual	Favorable Unfavorable Neither Favorable nor Unfavorable
Variable costs
Direct materials	$50,840	$49,840	$1,000	Favorable
Direct labor	55,800	52,500	3,300	Favorable
Indirect materials	27,280	27,480	200	Unfavorable
Indirect labor	18,600	18,180	420	Favorable
Utilities	18,600	18,460	140	Favorable
Maintenance	9,920	10,220	300	Unfavorable
Total variable	181,040	176,680	4,360	Favorable
Fixed costs
Rent	11,700	11,700	0	Neither Favorable nor Unfavorable
Supervision	18,600	18,600	0	Neither Favorable nor Unfavorable
Depreciation	7,700	7,700	0	Neither Favorable nor Unfavorable
Total fixed	38,000	38,000	0	Neither Favorable nor Unfavorable
Total costs	$219,040	$214,680	$4,360	Favorable

The monthly budget amounts in the report were based on an expected production of 62,000 units per month or 744,000 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 60,000 units were produced.

(a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.)

The formula is

$Enter a dollar amount + variable costs of $Enter the variable costs per unit in dollars per unit.

(b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.)

In September, 66,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs.)

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