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	$4,300 + $1.30q
Utilities	$5,600 + $0.40q
Supplies	$1,400 + $0.10q
Equipment depreciation	$18,300 + $2.50q
Factory rent	$8,400
Property taxes	$2,800
Factory administration	$13,500 + $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	$ 8,940
Utilities	$ 7,670
Supplies	$ 2,030
Equipment depreciation	$ 28,300
Factory rent	$ 8,800
Property taxes	$ 2,800
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.

Packaging Solutions Corporation Spending Variances For the Month Ended March 31 \begin{tabular}{|l|r|r|r|} \hline & \multicolumn{1}{|c|}{ Actual } \\ Results & \multicolumn{1}{|c|}{ Spending Variances } & FlexibleBudget \\ \hline Labor-hours & 4,000 & & \\ \hline Direct labor & $8,620 & & \\ \hline Indirect labor & 8,940 & & \\ \hline Utilities & 7,670 & & \\ \hline Supplies & 2,030 & & \\ \hline Equipment depreciation & 28,300 & & \\ \hline Factory rent & 8,800 & & \\ \hline Property taxes & 2,800 & & \\ \hline Factory administration & 15,670 & & \\ \hline Total expense & $141,830 & & \\ \hline \end{tabular}