Exercise 9-16 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 is the number of labor-hours worked in a month: 10 points Direct labor Indirect labor eBook Utilities Cost Formulas $15.809 $8,200 + $1.609 $6,400 + $0.809 $1,100 + $0.409 $23,000 + $3.709 $8,400 $2,100 $11,700 + $1.909 Supplies Equipment depreciation Factory rent Property taxes Factory administration References 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: 1. Prepare the Production Department's plannina budaet for the month 2. Prepare the Production Department's flexible budget for the month 3. Calculate the spending variances for all expense items. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense Exercise 9-16 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: points Direct labor Indirect labor eBook Utilities Cost Formulas $15.80g $8,200 + $1.609 $6,400 + $0.80g $1,100 + $0.409 $23,000 + $3.709 $ 8,400 $2,100 $11,700 + $1.909 Supplies Equipment depreciation Factory rent Property taxes Factory administration References 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: 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. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ Direct labor Indirect labor Utilities Cost Formulas $15.809 $8,200 + $1.609 $6,400 + $0.809 $1,100 + $0.40g $23,000 + $3.709 $8,400 $2,100 $11,700 + $1.909 Supplies Equipment depreciation Factory rent Property taxes Factory administration points eBook References 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: 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. Complete this question by entering your answers in the tabs below. Required Required Required Calculate the spending variances for all expense items. (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.) Show less Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Spending Flexible Results Variances Budget Labor-hours 8,400 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense 134,730 19,860 14,5701 4,9801 54,080 8,700 2,1001 26,4701 | 265,490
