(This question has 3 items, (a), (b), and (c)) (2 + 9 + 3 = 14 marks)

Limo Company uses budgets in controlling costs. The March 2020 budget report for the company's Assembling Department is as follows:

Limo Company

Budget Report

Assembling Department

For the Month Ended March 31 2020

Manufacturing Overhead Budget Actual

Variable costs:

Indirect materials $48,000 46,000

Indirect labour 65,00051,200

Utilities 15,00015,600

Maintenance 12,00012,500

Fixed Costs:

Rent15,000 14,200

Supervision18,00019,300

Depreciation5,0005,200

The monthly budget amounts in the report were based on an expected productionof 65,000 units per month or 780,000 units per year.

Given the actual expenses, the Assembling Department manager is pleased withthe report and expects some praise for a job well done.

The company president, however, is unhappy with the results for March becauseonly 55,000 units were produced .

Required:

(a) State the total monthly budgeted cost formula. (2 marks)

(b) Prepare Budget Report for March using flexible budget data. (9 marks)

(c) Which budget report provides a better basis for evaluating performance? Explain (3 marks)