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:

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:

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.

Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $15.809 $8,200 + $1.609 $6,400 + $0.809 $1,100 + $0.409 $23,000 + $3.709 $8,400 $2,100 $11,700 + $1.909 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $134,730 $ 19,860 $ 14,570 $ 4,980 $ 54,080 $ 8,700 $ 2,100 $ 26,470 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 $ $ 0 Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Actual labor-hours Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ $ 0 Packaging Solutions Corporation Production Department Flexible Budget Performance Report For the Month Ended March 31 Actual Flexible Results Spending Variances Budget Activity Variances 8,400 Planning Budget Labor-hours Direct labor $ Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 134,730 19,860 14,570 4,980 54,080 8,700 2,100 26,470 265,490 Total expense $