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:

Cost FormulasDirect labor$16.40qIndirect labor$4,200 + $1.90qUtilities$5,300 + $0.80qSupplies$1,200 + $0.30qEquipment depreciation$18,000 + $2.40qFactory rent$8,500Property taxes$2,700Factory administration$13,800 + $0.60q

The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below:

Actual Cost Incurred in MarchDirect labor$67,200 Indirect labor$11,360 Utilities$9,050 Supplies$2,670 Equipment depreciation$27,600 Factory rent$8,900 Property taxes$2,700 Factory administration$15,550

Required:

1. Prepare the Production Departments planning budget for the month.

Packaging Solutions CorporationProduction Department Planning BudgetFor the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense$0

2. Prepare the Production Departments flexible budget for the month.

Packaging Solutions CorporationProduction Department Flexible BudgetFor the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense$0

3. Prepare 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 CorporationProduction Department Flexible Budget Performance ReportFor the Month Ended March 31 Actual Results Flexible Budget Planning BudgetLabor-hours4,000 Direct labor$67,200 Indirect labor11,360 Utilities9,050 Supplies2,670 Equipment depreciation27,600 Factory rent8,900 Property taxes2,700 Factory administration15,550 Total expense$145,030