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 $16.40q Indirect labor $4,200 + $1.30q Utilities $5,500 + $0.40q Supplies $1,500 + $0.20q Equipment depreciation $18,600 + $2.90q Factory rent $8,400 Property taxes $3,000 Factory administration $13,000 + $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 $ 67,200 Indirect labor $ 8,840 Utilities $ 7,570 Supplies $ 2,550 Equipment depreciation $ 30,200 Factory rent $ 8,800 Property taxes $ 3,000 Factory administration $ 15,170 Required:

1. Prepare the Production Departments planning budget for the month.

2. Prepare the Production Departments flexible budget for the month.

3. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances.

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	$0

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	$0

Packaging Solutions Corporation
Production Department Flexible Budget Performance Report
For the Month Ended March 31
	Actual Results			Flexible Budget			Planning Budget
Labor-hours	4,000
Direct labor	$67,200
Indirect labor	8,840
Utilities	7,570
Supplies	2,550
Equipment depreciation	30,200
Factory rent	8,800
Property taxes	3,000
Factory administration	15,170
Total expense	$143,330