EXERCISE 91 Flexible Budget Performance Report in a Cost Center L09-1, L09-2, L09-3, L09-4 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 Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $15.809 $8,200 + $1.609 $6,400 + $0.800 $1,100 + $0.409 $23,000 + $3.709 $8,400 $2,100 $11,700 + $1.909 The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $134,730 $19,860 $14,570 $4,980 $54,080 $8,700 $2,100 $26,470 Required: Using Exhibit 92 as your guide, prepare the Production Department's planning budget for the month. Using Exhibit 95 as your guide, prepare the Production Department's flexible budget for the month. Using Exhibit 9-8 as your guide, prepare the Production Department's flexible budget perfor- mance report for March, including both the spending and activity variances. What aspects of the flexible budget performance report should be brought to management's attention? Explain