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, whereqis the number of labor-hours worked in a month:

Direct labor$16.30q

Indirect labor$4,300 + $1.50q

Utilities$5,400 + $0.30q

Supplies$1,700 + $0.10q

Equipment depreciation$18,400 + $2.50q

Factory rent$8,100

Property taxes$2,900

Factory administration$13,700 + $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:

Direct labor$66,780

Indirect labor$9,780

Utilities$7,050

Supplies$2,330

Equipment depreciation$28,400

Factory rent$8,500

Property taxes$2,900

Factory administration$15,870

Required:

1. Prepare the Production Department's planning budget for the month.

Packaging Solutions Corporation

Production Department Planning Budget

For the Month Ended March 31

Direct labor

Indirect labor

UtilitiesSupplies

Equipment depreciation

Factory rent

Property taxes

Factory administration

Total expense

2. Prepare the Production Department's flexible budget for the month.

Packaging Solutions Corporation

Production Department Flexible Budget

For the Month Ended March 31

Direct labor

Indirect labor

Utilities

Supplies

Equipment depreciation

Factory rent

Property taxes

Factory administration

Total expense

3. Calculate the spending variances for all expense items.

Packaging Solutions Corporation

Spending Variances

For the Month Ended March 31

Actual Results Spending Variances Flexible Budget

Labor-hours 4,000

Direct labor $66,780

Indirect labor 9,780

Utilities 7,050

Supplies 2,330

Equipment depreciation 28,400

Factory rent 8,500

Property taxes 2,900

Factory administration 15,870

Total expense $141,610