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Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month:

	Cost Formulas
Direct labor	$15.80q
Indirect labor	$8,200 + $1.60q
Utilities	$6,400 + $0.80q
Supplies	$1,100 + $0.40q
Equipment depreciation	$23,000 + $3.70q
Factory rent	$8,400
Property taxes	$2,100
Factory administration	$11,700 + $1.90q

The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below:

	Actual Cost Incurred in March
Direct labor	$ 134,730
Indirect labor	$ 19,860
Utilities	$ 14,570
Supplies	$ 4,980
Equipment depreciation	$ 54,080
Factory rent	$ 8,700
Property taxes	$ 2,100
Factory administration	$ 26,470

Required:

1. Prepare the Production Departments planning budget for the month.

2. Prepare the Production Departments flexible budget for the month.

3. Calculate the spending variances for all expense items.

Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense S 0 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ 0 Calculate the spending variances for all expense items. (Indicate the effect of each variance by selecting "F" for favorable, "U for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) Flexible Budget Labor-hours Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Results Spending Variances 8,400 S 134,730 19,860 14,570 4,980 54,080 8,700 2,100 26,470 $ 265,490 Total expense

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