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 $ 16.60 q

Indirect labor $ 4,500 + $ 1.40 q

Utilities $ 5,300 + $ 0.60 q

Supplies $ 1,300 + $ 0.30 q

Equipment depreciation $ 18,500 + $ 3.00 q

Factory rent $ 8,200

Property taxes $ 2,500

Factory administration $ 13,200 + $ 0.70 q

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

Actual Cost Incurred in March

Direct labor $ 64,720

Indirect labor $ 9,280

Utilities $ 8,090

Supplies $ 2,710

Equipment depreciation $ 29,900

Factory rent $ 8,600

Property taxes $ 2,500

Factory administration $ 15,230

1.The company had budgeted for an activity level of 4,000 labor-hours in March. Complete the Production Departments planning budget for the month.

2.The company actually worked 3,800 labor-hours in March. Complete the Production Departments flexible budget for the month.

3. Calculate the spending variances for all expense items.

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	5.7	pounds	$	2.50	per pound	$	14.25
Direct labor	0.5	hours	$	7.50	per hour	$	3.75

During the most recent month, the following activity was recorded:

a.	Eleven thousand pounds of material were purchased at a cost of $2.40 per pound.
b.	The company produced only 1,100 units, using 9,900 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c.	Six hundred and fifty hours of direct labor time were recorded at a total labor cost of $7,80

4.What is Direct Materials Price Variance?