Exercise 9-16 (Algo) Flexible Budgets in a Cost Center [LO9-1, LO9-2] 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: Cost Formulas Direct labor $16.50q Indirect labor $4,700 + $1.40q Utilities $5,200 + $0.70q Supplies $1,300 + $0.20q Equipment depreciation $18,400 + $3.10q Factory rent $8,400 Property taxes $2,900 Factory administration $13,300 + $0.70q 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 $ 70,920 Indirect labor $ 10,040 Utilities $ 8,670 Supplies $ 2,390 Equipment depreciation $ 31,420 Factory rent $ 8,800 Property taxes $ 2,900 Factory administration $ 15,610 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.