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	$16.20q
Indirect labor	$4,000 + $1.40q
Utilities	$5,700 + $0.50q
Supplies	$1,200 + $0.30q
Equipment depreciation	$18,200 + $2.80q
Factory rent	$8,100
Property taxes	$2,800
Factory administration	$13,700 + $0.70q

The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below:

	Actual Cost Incurred in March
Direct labor	$	66,360
Indirect labor	$	9,060
Utilities	$	8,190
Supplies	$	2,670
Equipment depreciation	$	29,400
Factory rent	$	8,500
Property taxes	$	2,800
Factory administration	$	15,870

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.

• Required 1

Prepare the Production Departments 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

• Required 2

Prepare the Production Departments 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

• Required 3

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 (i.e., zero variance). Input all amounts as positive values.)

	Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Results Spending Variances Flexible Budget Labor-hours 4,000 Direct labor $66,360 Indirect labor 9,060 Utilities 8,190 Supplies 2,670 Equipment depreciation 29,400 Factory rent 8,500 Property taxes 2,800 Factory administration 15,870 Total expense $142,850