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	$4,200 + $1.60q
Utilities	$5,300 + $0.60q
Supplies	$1,800 + $0.20q
Equipment depreciation	$18,200 + $2.80q
Factory rent	$8,400
Property taxes	$2,900
Factory administration	$13,500 + $0.80q

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	$	63,920
Indirect labor	$	9,780
Utilities	$	8,090
Supplies	$	2,810
Equipment depreciation	$	28,840
Factory rent	$	8,800
Property taxes	$	2,900
Factory administration	$	15,930

Required:

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

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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

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

look like this

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

3. Calculate the spending variances for all expense items.

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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		Flexible Budget
Labor-hours	3,800
Direct labor	$63,920
Indirect labor	9,780
Utilities	8,090
Supplies	2,810
Equipment depreciation	28,840
Factory rent	8,800
Property taxes	2,900
Factory administration	15,930
Total expense	$141,070