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formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.60 q Indirect labor $4,300 + $1.70 q Utilities
formulas, where q is the number of labor-hours worked in a month:
Cost Formulas | |
Direct labor | $16.60q |
Indirect labor | $4,300 + $1.70q |
Utilities | $5,700 + $0.60q |
Supplies | $1,400 + $0.40q |
Equipment depreciation | $18,400 + $2.60q |
Factory rent | $8,300 |
Property taxes | $2,800 |
Factory administration | $13,400 + $0.80q |
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 | $ | 71,360 | |
Indirect labor | $ | 10,960 | |
Utilities | $ | 8,730 | |
Supplies | $ | 3,370 | |
Equipment depreciation | $ | 29,320 | |
Factory rent | $ | 8,700 | |
Property taxes | $ | 2,800 | |
Factory administration | $ | 16,150 | |
Required:
1. Prepare the Production Departments planning budget for the month.
2. Prepare the Production Departments flexible budget for the month.
3. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances.
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