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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	$16.30q
Indirect labor	$4,600 + $1.30q
Utilities	$5,200 + $0.90q
Supplies	$1,600 + $0.10q
Equipment depreciation	$18,800 + $2.60q
Factory rent	$8,200
Property taxes	$2,700
Factory administration	$13,700 + $0.60q

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	$	66,780
Indirect labor	$	9,240
Utilities	$	9,370
Supplies	$	2,230
Equipment depreciation	$	29,200
Factory rent	$	8,600
Property taxes	$	2,700
Factory administration	$	15,450

Required:

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

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

3. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances.

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

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