The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been less than the monthly static budget of $335,000. 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 $15.00
Utility cost per direct labor hour $1.20
Direct labor hours per unit 0.75
Planned monthly unit production 100,000
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. Enter all amounts as positive numbers.

The total units produced are as follows:

January: 90000 units

February: 100000 units

March: 110000 units

Explanation:

The total units produced are as follows:

January: 90000 units

February: 100000 units

March: 110000 units

Wages for each month are calculated as:

January: Wages = (Units * Direct labor hours per unit) + (hours * wages per hour) = (90000*$0.75) + (22500*$15) = $405000

February: Wages = (Units * Direct labor hours per unit) + (hours * wages per hour) = (100000*$0.75) + (25000*$15) = $450000

March: Wages = (Units * Direct labor hours per unit) + (hours * wages per hour) = (110000*$0.75) + (27500*$15) = $495000

Utilities for each month is:

January: Utility: = (hours * Utility cost per direct labor hour) = 22500 * 1.20 = $27000

February: Utility: = (hours * Utility cost per direct labor hour) = 25000 * 1.20 = $30000

March: Utility: = (hours * Utility cost per direct labor hour) = 27500 * 1.20 = $33000

Since depreciation is fixed and do not flex it is the same for all the months at $60000

The total for each month is:

January: Total = Wages + Utilities + depreciation = $405000 + $27000 + $60000 = $492000

February: Total = Wages + Utilities + depreciation = $450000 + $30000 + $60000 = $540000

March: Total = Wages + Utilities + depreciation = $495000 + $33000 + $60000 = $588000

contributions made after 1986. after-tax contributions to employer plans made after 1986 are recovered pro rata with taxable amounts. the remaining $80,000 is from pre-tax contributions, employer matching dollars, and earnings on those amounts.