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\mathrm{.}20$q

Indirect labor $$4,800+$ $$1\mathrm{.}40$q

Utilities $$5,800+$ $$0\mathrm{.}40$q

Supplies $$1,400+$ $$0\mathrm{.}20$q

Equipment depreciation $$18,600+$ $$3\mathrm{.}00$q

Factory rent $$8,600$

Property taxes $$3,000$

Factory administration $$13,700+$ $$0\mathrm{.}80$q

The Production Department planned to work $4,000$ labor$-$hours in March; however, it actually worked $3,800$ labor$-$hours during the month. Its actual costs incurred in March are listed below:

Actual Cost Incurred in March

Direct labor $ $63,120$

Indirect labor $ $9,580$

Utilities $ $7,790$

Supplies $ $2,410$

Equipment depreciation $ $30,000$

Factory rent $ $9,000$

Property taxes $ $3,000$

Factory administration $ $16,130$

Required:

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

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

$3.$ Calculate the spending variances for all expense items.

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

Solutions Corporation

Production Department Planning Budget

For the Month Ended March $31$

Budgeted labor hours $=$

Direct labor $=$

Indirect labor$=$

Utilities $=$

Supplies$=$

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 Bu

Actual labor hours$=$

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. $($Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values.$)$

Packaging Solutions Corporation

Spending Variances

For the Month Ended March $31$

Actual Results Spending Variances FlexibleBudget

Labor$-$hours $=3,800$

Direct labor$=$ $$63,120$

Indirect labor $=9,580$

Utilities $=7,790$

Supplies $=2,410$

Equipment depreciation $=30,000$

Factory rent$=9,000$

Property taxes $=3,000$

Factory administration $=16,130$

Total expense $=$$$141,030$