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				$	15.80	q
Indirect labor	$	8,200	+	$	1.60	q
Utilities	$	6,400	+	$	0.80	q
Supplies	$	1,100	+	$	0.40	q
Equipment depreciation	$	23,000	+	$	3.70	q
Factory rent				$	8,400
Property taxes				$	2,100
Factory administration	$	11,700	+	$	1.90	q

The actual costs incurred in March in the Production Department are listed below:

	Actual Cost Incurred in March
Direct labor	$	134,730
Indirect labor	$	19,860
Utilities	$	14,570
Supplies	$	4,980
Equipment depreciation	$	54,080
Factory rent	$	8,700
Property taxes	$	2,100
Factory administration	$	26,470

Required:
1.	The company had budgeted for an activity level of 8,000 labor-hours in March. Complete the Production Departments 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

2.

The company actually worked 8,400 labor-hours in March. Complete the Production Departments 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

3.

Complete the Production Departments flexible budget performance report for March, including both the spending and activity variances. (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.)

Packaging Solutions Corporation
Production Department Flexible Budget Performance Report
For the Month Ended March 31
	Spending Variances		Activity Variances
Direct labor		U		U
Indirect labor		F		U
Utilities		U		U
Supplies		U		U
Equipment depreciation		None		U
Factory rent		U		None
Property taxes		None		None
Factory administration		F		U
Total expense		U		U

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:

	Fixed Component per Month		Variable Component per Job		Actual Total for February
Revenue			$	360	$	18,950
Technician wages	$	6,400			$	6,450
Mobile lab operating expenses	$	2,900	$	35	$	4,530
Office expenses	$	2,600	$	2	$	3,050
Advertising expenses	$	970			$	995
Insurance	$	1,680			$	1,680
Miscellaneous expenses	$	500	$	3	$	465

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530.

The company expected to work 50 jobs in February, but actually worked 52 jobs.

Required:

Complete the flexible budget performance report showing AirQual Test Corporations revenue and spending variances and activity variances for February. (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.)

AirQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
	Revenue and Spending Variances		Activity Variances
Revenue		F		F
Expenses:
Technician wages		U		None
Mobile lab operating expenses		F		U
Office expenses		U		U
Advertising expenses		U		None
Insurance		None		None
Miscellaneous expenses		F		U
Total expense		U		U
Net operating income		F		F

You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee, you took the variances and supporting data home last night to study.

On your way to work this morning, the papers were laying on the seat of your new, red convertible. As you were crossing a bridge on the highway, a sudden gust of wind caught the papers and blew them over the edge of the bridge and into the stream below. You managed to retrieve only one page, which contains the following information:

Standard Cost Card
Direct materials, 2.00 pounds at $16.90 per pound	$	33.80
Direct labor, 1.00 direct labor-hours at $15.20 per direct labor-hour	$	15.20
Variable manufacturing overhead, 1.00 direct labor-hours at $9.30 per direct labor-hour	$	9.30

	Total Standard Cost*		Variances Reported
			Price or Rate			Quantity or Efficiency
Direct materials	$	676,000	$	12,180	F	$	33,800	U
Direct labor	$	304,000	$	4,200	U	$	15,200	U
Variable manufacturing overhead	$	186,000	$	4,200	F	$	?	U

^*Applied to Work in Process during the period.

Entry obliterated.

You recall that manufacturing overhead cost is applied to production on the basis of direct labor-hours and that all of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

It is now 8:30 a.m. The executive committee meeting starts in just one hour; you realize that to avoid looking like a bungling fool you must somehow generate the necessary backup data for the variances before the meeting begins. Without backup data it will be impossible to lead the discussion or answer any questions.

Required:

1.	How many units were produced last period?

Number of Units Produced______________

2. How many pounds of direct material were purchased and used in production? ___________________

3. What was the actual cost per pound of Material?______________

4. How many actual direct labor-hours were worked during the period?________________

5. What was the actual rate paid per direct labor-hour?_______________

6. How much actual variable manufacturing overhead cost was incurred during the period?___________