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 40 q Indirect labor $4,700 $1 40 q Utilities $5,200 $0 60 q Supplies $1,800 $0 30 q Equipment depreciation $18,200 $3 00 q Factory rent $8,200 Property taxes $2,600 Factory administration $13,100 $0 70 q 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 $ 67,200 Indirect labor $ 9,760 Utilities $ 8,110 Supplies $ 3,270 Equipment depreciation $ 30,200 Factory rent $ 8,600 Property taxes $ 2,600 Factory administration $ 15,270 Required 1 Prepare the Production Departments planning budget for the month Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $0 2 Prepare the Production Departments 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 $0 3 Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances Packaging Solutions Corporation Production Department Flexible Budget Performance Report For the Month Ended March 31 Actual Results Flexible Budget Planning Budget Labor hours 4,000 Direct labor $67,200 Indirect labor 9,760 Utilities 8,110 Supplies 3,270 Equipment depreciation 30,200 Factory rent 8,600 Property taxes 2,600 Factory administration 15,270 Total expense $145,010

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 25, 2024

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	$4,700 + $1.40q
Utilities	$5,200 + $0.60q
Supplies	$1,800 + $0.30q
Equipment depreciation	$18,200 + $3.00q
Factory rent	$8,200
Property taxes	$2,600
Factory administration	$13,100 + $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	$	67,200
Indirect labor	$	9,760
Utilities	$	8,110
Supplies	$	3,270
Equipment depreciation	$	30,200
Factory rent	$	8,600
Property taxes	$	2,600
Factory administration	$	15,270

Required:

1. Prepare the Production Departments planning budget for the month.

Packaging Solutions Corporation
Production Department Planning Budget
For the Month Ended March 31


Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Total expense	$0

2. Prepare the Production Departments 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	$0

3. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances.

Packaging Solutions Corporation
Production Department Flexible Budget Performance Report
For the Month Ended March 31
	Actual Results	Flexible Budget	Planning Budget
Labor-hours	4,000

Direct labor	$67,200
Indirect labor	9,760
Utilities	8,110
Supplies	3,270
Equipment depreciation	30,200
Factory rent	8,600
Property taxes	2,600
Factory administration	15,270
Total expense	$145,010