Question
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
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 | $ | 16.30 | q | |||
Indirect labor | $ | 4,000 | + | $ | 2.00 | q |
Utilities | $ | 5,600 | + | $ | 0.50 | q |
Supplies | $ | 1,500 | + | $ | 0.40 | q |
Equipment depreciation | $ | 18,100 | + | $ | 2.90 | q |
Factory rent | $ | 8,600 | ||||
Property taxes | $ | 2,900 | ||||
Factory administration | $ | 13,400 | + | $ | 0.60 | q |
The actual costs incurred in March in the Production Department are listed below: |
Actual Cost Incurred in March | |||
Direct labor | $ | 65,150 | |
Indirect labor | $ | 11,380 | |
Utilities | $ | 8,040 | |
Supplies | $ | 3,350 | |
Equipment depreciation | $ | 29,410 | |
Factory rent | $ | 9,000 | |
Property taxes | $ | 2,900 | |
Factory administration | $ | 15,090 | |
Required: | |||||
1. | The company had budgeted for an activity level of 4,100 labor-hours in March. Complete the Production Departments planning budget for the month.
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