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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 $16.30q
Indirect labor $4,300+ $1.90q
Utilities $5,100+ $0.50q
Supplies $1,500+ $0.20q
Equipment depreciation $18,800+ $2.60q
Factory rent $8,000
Property taxes $2,900
Factory administration $13,300+ $0.60q
The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March
Direct labor $ 68,410
Indirect labor $ 11,650
Utilities $ 7,640
Supplies $ 2,570
Equipment depreciation $ 29,460
Factory rent $ 8,400
Property taxes $ 2,900
Factory administration $ 15,110
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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