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:

Direct labor				$	16.50	q
Indirect labor	$	4,600	+	$	2.10	q
Utilities	$	5,500	+	$	0.80	q
Supplies	$	1,700	+	$	0.10	q
Equipment depreciation	$	18,600	+	$	2.70	q
Factory rent				$	8,200
Property taxes				$	2,900
Factory administration	$	13,000	+	$	0.70	q

The actual costs incurred in March in the Production Department are listed below:

	Actual Cost Incurred in March
Direct labor	$	69,270
Indirect labor	$	12,810
Utilities	$	9,330
Supplies	$	2,340
Equipment depreciation	$	29,670
Factory rent	$	8,600
Property taxes	$	2,900
Factory administration	$	15,240

Required:

1.

The company had budgeted for an activity level of 4,300 labor-hours in March. Complete 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.

The company actually worked 4,100 labor-hours in March. Complete 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.

Complete 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
	Spending Variances		Activity Variances
Direct labor		F or U or NONE		F,U,none?
Indirect labor		F,U,none?		F,U,none?
Utilities		F,U,none?		F,U,none?
Supplies		F,U,none?		F,U,none?
Equipment depreciation		F,U,none?		F,U,none?
Factory rent		F,U,none?		F,U,none?
Property taxes		F,U,none?		F,U,none?
Factory administration		F,U,none?		F,U,none?
Total expense		F,U,none?		F,U,none?