(1.) 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	$16.40q
Indirect labor	$4,100 + $1.40q
Utilities	$5,300 + $0.60q
Supplies	$1,300 + $0.30q
Equipment depreciation	$18,600 + $2.60q
Factory rent	$8,400
Property taxes	$2,900
Factory administration	$13,500 + $0.80q

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 Incurred in March
Direct labor	$	70,480
Indirect labor	$	9,440
Utilities	$	8,330
Supplies	$	2,830
Equipment depreciation	$	29,520
Factory rent	$	8,800
Property taxes	$	2,900
Factory administration	$	16,250

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.

(2.)

Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials: 6 microns per toy at $0.33 per micron

Direct labor: 1.2 hours per toy at $6.90 per hour

During July, the company produced 4,500 Maze toys. The toy's production data for the month are as follows:

Direct materials: 79,000 microns were purchased at a cost of $0.32 per micron. 45,250 of these microns were still in inventory at the end of the month.

Direct labor: 5,900 direct labor-hours were worked at a cost of $44,250.

Required:

1. Compute the following variances for July: (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. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)

a. The materials price and quantity variances.

b. The labor rate and efficiency variances.