Question
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 | $4,600 + $1.60q |
| Utilities | $5,100 + $0.40q |
| Supplies | $1,400 + $0.30q |
| Equipment depreciation | $18,300 + $2.70q |
| Factory rent | $8,300 |
| Property taxes | $2,600 |
| Factory administration | $13,100 + $0.70q |
The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below:
| Actual Cost Incurred in March | |
|---|---|
| Direct labor | $ 67,620 |
| Indirect labor | $ 10,500 |
| Utilities | $ 7,170 |
| Supplies | $ 2,870 |
| Equipment depreciation | $ 29,100 |
| Factory rent | $ 8,700 |
| Property taxes | $ 2,600 |
| Factory administration | $ 15,270 |
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.
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 | $4,600 + $1.60q |
| Utilities | $5,100 + $0.40q |
| Supplies | $1,400 + $0.30q |
| Equipment depreciation | $18,300 + $2.70q |
| Factory rent | $8,300 |
| Property taxes | $2,600 |
| Factory administration | $13,100 + $0.70q |
The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below:
| Actual Cost Incurred in March | |
|---|---|
| Direct labor | $ 67,620 |
| Indirect labor | $ 10,500 |
| Utilities | $ 7,170 |
| Supplies | $ 2,870 |
| Equipment depreciation | $ 29,100 |
| Factory rent | $ 8,700 |
| Property taxes | $ 2,600 |
| Factory administration | $ 15,270 |
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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Beyond Agile Auditing Three Core Components To Revolutionize Your Internal Audit Practices
Authors: Clarissa Lucas
1st Edition
1950508676, 978-1950508679
