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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:

Cost Formulas
Direct labor $16.20q
Indirect labor $4,500 + $1.50q
Utilities $5,300 + $0.70q
Supplies $1,800 + $0.30q
Equipment depreciation $18,100 + $2.70q
Factory rent $8,100
Property taxes $2,800
Factory administration $13,700 + $0.50q

The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below:

Actual Cost Incurred in March
Direct labor $ 64,740
Indirect labor $ 9,830
Utilities $ 8,560
Supplies $ 3,240
Equipment depreciation $ 28,630
Factory rent $ 8,500
Property taxes $ 2,800
Factory administration $ 14,980

Required:

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

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

3. Calculate the spending variances for all expense items.

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