Exercise 8-16 Flexible Budgets in a Cost Center [LO8-1, LO8-2] 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: Direct labor $16.20q 4,400 2.00q Indirect labor 5,400 0.60q Utilities 1,600 0.10 Supplies Equipment depreciation $18,500 2.90q $8,300 Factory rent $2,500 Property taxes $13,200 0.70 Factory administration The actual costs incurred in March in the Production Department are listed below: Actual Cost Incurred in March 67,980 Direct labor 12,180 Indirect labor Utilities 8,370 2,240 Supplies 30,390 Equipment depreciation 8,700 Factory rent Property taxes 2,500 15,440 Factory administration