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$15.80qIndirect labor$8,200 + $1.60qUtilities$6,400 + $0.80qSupplies$1,100 + $0.40qEquipment depreciation$23,000 + $3.70qFactory rent$8,400Property taxes$2,100Factory administration$11,700 + $1.90q

The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below:

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

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.