Question
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 $16.40q Indirect labor $4,000 + $1.40q Utilities $5,300 + $0.30q Supplies $1,600 + $0.10q Equipment depreciation $18,500 + $3.00q Factory rent $8,200 Property taxes $2,500 Factory administration $13,600 + $0.60q The Production Department planned to work 4,400 labor-hours in March; however, it actually worked 4,200 labor-hours during the month. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March Direct labor $ 70,480 Indirect labor $ 9,340 Utilities $ 7,010 Supplies $ 2,250 Equipment depreciation $ 31,100 Factory rent $ 8,600 Property taxes $ 2,500 Factory administration $ 15,470 Required: Prepare the Production Department's planning budget for the month. Prepare the Production Department's flexible budget for the month. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started