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 $15.80q

Indirect labor $8,200 + $1.60q

Utilities $6,400 + $0.80q

Supplies $1,100 + $0.40q

Equipment depreciation $23,000 + $3.70q

Factory rent $8,400

Property taxes $2,100

Factory administration $11,700 + $1.90q

The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below:

Actual Cost Incurred in March

Direct labor $ 134,730

Indirect labor $ 19,860

Utilities $ 14,570

Supplies $ 4,980

Equipment depreciation $ 54,080

Factory rent $ 8,700

Property taxes $ 2,100

Factory administration $ 26,470

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.