Sunland Company uses budgets in controlling costs. The August 2022 budget report for the company’s Assembling Department

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Sunland Company uses budgets in controlling costs. TheAugust 2022 budget report for the company’s Assembling Departmentis as follows.
Sunland CompanyBudget ReportAssembling DepartmentFor the Month Ended August 31, 2022
Difference
Manufacturing Costs
Budget
Actual
FavorableUnfavorableNeither Favorablenor Unfavorable
Variable costs
Direct materials
$51,240
$50,140
$1,100
Direct labor
59,780
56,580
3,200
Indirect materials
25,620
25,820
200
Indirect labor
21,960
21,560
400
Utilities
18,300
18,170
130
Maintenance
6,100
6,450
350
Total variable
183,000
178,720
4,280
Fixed costs
Rent
10,100
10,100
–0–
Supervision
18,000
18,000
–0–
Depreciation
6,200
6,200
–0–
Total fixed
34,300
34,300
–0–
Total costs
$217,300
$213,020
$4,280
The monthly budget amounts in the report were based on an expectedproduction of 61,000 units per monthor 732,000 units per year. The Assembling Departmentmanager is pleased with the report and expects a raise, or at leastpraise for a job well done. The company president, however, isunhappy with the results for August becauseonly 59,000 units were produced.