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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 $16.60q
Indirect labor $4,200+ $1.80q
Utilities $5,800+ $0.80q
Supplies $1,300+ $0.20q
Equipment depreciation $18,800+ $2.60q
Factory rent $8,400
Property taxes $2,900
Factory administration $13,600+ $0.60q
The Production Department planned to work 4,500 labor-hours in March; however, it actually worked 4,300 labor-hours during the month. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March
Direct labor $ 73,020
Indirect labor $ 11,480
Utilities $ 9,790
Supplies $ 2,410
Equipment depreciation $ 29,980
Factory rent $ 8,800
Property taxes $ 2,900
Factory administration $ 15,530
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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