Exercise 9-16 (Algo) Flexible Budgets in a Cost Center [LO9-1, L09-2] 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 Indirect labor Utilities Cost Formulas $16.50g $4,600 + $1.80g $5,100 $0.90g Supplies $1,400 + $0.20g Equipment depreciation $18,100 + $2.80g Factory rent $8,500 Property taxes Factory administration $2,500 $13,300 +$0.90g The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 65,970 $ 11,160 $ 9,180 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Required: $ 2,430 $ 29,020 $ 8,900 $ 2,500 $ 16,220 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items.