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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 $16.30q
Indirect labor $4,600+ $2.10q
Utilities $5,600+ $0.50q
Supplies $1,500+ $0.30q
Equipment depreciation $18,700+ $3.00q
Factory rent $8,200
Property taxes $2,800
Factory administration $13,800+ $0.70q
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 March
Direct labor $ 66,780
Indirect labor $ 12,600
Utilities $ 8,090
Supplies $ 2,970
Equipment depreciation $ 30,700
Factory rent $ 8,600
Property taxes $ 2,800
Factory administration $ 15,970
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.

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