Q36

Acompany manufactures and sells a wide variety of 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 is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cont Formulas $16.404 $4,300 - $2.104 $5,200 $0.700 $1,500 + $0.200 $18,400 + $3.000 $8,400 $2.900 $13,300 $0.004 The Production Department planned to work 4.400 labor-hours in March; however, it actually worked 4,200 labor hours during the month. Its actual costs incurred in March are listed below. Actual Cost Ineurred in March Direct labor $70,400 Indirect labor $12,720 Utilities $ 8,670 Supplies $ 2,590 Equipment depreciation $31.000 Factory rent 5 8,800 Property taxes $ 2.900 Factory administration $16,050 Required Prepare the production Department's flexible budget performance report for March, including both the spending and activity variances. (Indicate the effect of each variance by selecting "P" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) The Company Production Department Flexible Budget Performance Report For the Month Ended March 31 Flexible Planning Budget Budget Labor hours 4.200 Actual Results Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ 70,480 12,720 8,670 2,590 31,000 8,800 2,900 16.050 $ 153,210