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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 $16.50q
Indirect labor $4,500 + $1.40q
Utilities $5,100 + $0.70q
Supplies $1,400 + $0.30q
Equipment depreciation $18,400 + $2.90q
Factory rent $8,400
Property taxes $2,600
Factory administration $13,800 + $0.60q

The Production Department planned to work 4,400 labor-hours in March; however, it actually worked 4,200 labor-hours during the month. Its actual costs incurred in March are listed below:

Actual Cost Incurred in March
Direct labor $ 70,920
Indirect labor $ 9,840
Utilities $ 8,570
Supplies $ 2,930
Equipment depreciation $ 30,580
Factory rent $ 8,800
Property taxes $ 2,600
Factory administration $ 15,670

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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