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 30 q Indirect labor $4,000 $2 10 q Utilities $5,100 $0 40 q Supplies $1,300 $0 30 q Equipment depreciation $18,400 $2 90 q Factory rent $8,300 Property taxes $2,900 Factory administration $13,300 $0 90 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 $ 63,520 Indirect labor $ 11,580 Utilities $ 7,090 Supplies $ 2,710 Equipment depreciation $ 29,420 Factory rent $ 8,700 Property taxes $ 2,900 Factory administration $ 16,130 Required 1 Prepare the Production Departments planning budget for the month 2 Prepare the Production Departments flexible budget for the month 3 Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances 1 The company had budgeted for an activity level of 4,100 labor hours in March Complete the Production Department's planning budget for the month 2 The company actually worked 3,900 labor hours in March Complete the Production Department's flexible budget for the month 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 )

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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	$4,000 + $2.10q
Utilities	$5,100 + $0.40q
Supplies	$1,300 + $0.30q
Equipment depreciation	$18,400 + $2.90q
Factory rent	$8,300
Property taxes	$2,900
Factory administration	$13,300 + $0.90q

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	$	63,520
Indirect labor	$	11,580
Utilities	$	7,090
Supplies	$	2,710
Equipment depreciation	$	29,420
Factory rent	$	8,700
Property taxes	$	2,900
Factory administration	$	16,130

Required:

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

2. Prepare the Production Departments flexible budget for the month.

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

1. The company had budgeted for an activity level of 4,100 labor-hours in March. Complete the Production Department's planning budget for the month. 2. The company actually worked 3,900 labor-hours in March. Complete the Production Department's flexible budget for the month. 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.)