Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly...

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Finance

Packaging Solutions Corporation manufactures and sells a widevariety of packaging products. Performance reports are preparedmonthly for each department. The planning budget and flexiblebudget for the Production Department are based on the followingformulas, where q is the number of labor-hours worked in amonth:
Cost Formulas
Direct labor $16.30q
Indirect labor $4,300 + $1.60q
Utilities $5,400 + $0.80q
Supplies $1,700 + $0.20q
Equipment depreciation $18,700 + $2.90q
Factory rent $8,100
Property taxes $2,400
Factory administration $13,400 + $0.80q
The Production Department planned to work 4,200 labor-hours inMarch; however, it actually worked 4,000 labor-hours during themonth. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March
Direct labor $ 66,780
Indirect labor $ 10,200
Utilities $ 9,150
Supplies $ 2,750
Equipment depreciation $ 30,300
Factory rent $ 8,500
Property taxes $ 2,400
Factory administration $ 15,990
Required:
1. Prepare the Production Department’s planning budget for themonth.
2. Prepare the Production Department’s flexible budget for themonth.
3. Prepare the Production Department’s flexible budgetperformance report for March, including both the spending andactivity variances.

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Packaging Solutions Corporation manufactures and sells a widevariety of packaging products. Performance reports are preparedmonthly for each department. The planning budget and flexiblebudget for the Production Department are based on the followingformulas, where q is the number of labor-hours worked in amonth:Cost FormulasDirect labor$16.30qIndirect labor$4,300 + $1.60qUtilities$5,400 + $0.80qSupplies$1,700 + $0.20qEquipment depreciation$18,700 + $2.90qFactory rent$8,100Property taxes$2,400Factory administration$13,400 + $0.80qThe Production Department planned to work 4,200 labor-hours inMarch; however, it actually worked 4,000 labor-hours during themonth. Its actual costs incurred in March are listed below:Actual Cost Incurred in MarchDirect labor$66,780Indirect labor$10,200Utilities$9,150Supplies$2,750Equipment depreciation$30,300Factory rent$8,500Property taxes$2,400Factory administration$15,990Required:1. Prepare the Production Department’s planning budget for themonth.2. Prepare the Production Department’s flexible budget for themonth.3. Prepare the Production Department’s flexible budgetperformance report for March, including both the spending andactivity variances.

	Cost Formulas
Direct labor	$16.30q
Indirect labor	$4,300 + $1.60q
Utilities	$5,400 + $0.80q
Supplies	$1,700 + $0.20q
Equipment depreciation	$18,700 + $2.90q
Factory rent	$8,100
Property taxes	$2,400
Factory administration	$13,400 + $0.80q

	Actual Cost Incurred in March
Direct labor	$	66,780
Indirect labor	$	10,200
Utilities	$	9,150
Supplies	$	2,750
Equipment depreciation	$	30,300
Factory rent	$	8,500
Property taxes	$	2,400
Factory administration	$	15,990