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 + $2.00q
Utilities	$5,700 + $0.60q
Supplies	$1,600 + $0.20q
Equipment depreciation	$18,700 + $3.00q
Factory rent	$8,600
Property taxes	$3,000
Factory administration	$13,400 + $0.70q

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	$	12,580
Utilities	$	8,730
Supplies	$	2,690
Equipment depreciation	$	31,300
Factory rent	$	9,000
Property taxes	$	3,000
Factory administration	$	15,710

1. 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.

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. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances. (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
Production Department Flexible Budget Performance Report
For the Month Ended March 31
	Actual Results			Flexible Budget			Planning Budget
Labor-hours	4,200
Direct labor	$70,920
Indirect labor	12,580
Utilities	8,730
Supplies	2,690
Equipment depreciation	31,300
Factory rent	9,000
Property taxes	3,000
Factory administration	15,710
Total expense	$153,930