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 Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $16.60q $4,200 $1.70q $5,400 $0.800q $1,800 $0.10q $18,800 $2.80q $8, 300 $2,800 $13,500 $0.80q The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 66,380 $ 10,350 $ 9,070 $ 2,420 $ 29,720 $ 8,70e $ 2,800 $ 16,010 pare he Production Departments piaing budget tor me month Reguired: 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. Required 1 Requred 2 Required 3 Prepare the Production Department's planning budget for the month Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Direct labor Indirect labor Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense Required 1Required 2 E Required3 Prepare the Production Department's 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 Required 1 Required 2 Required 3 Calculate the spending variances for all expense items. (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 Spending Variances For the Month Ended March 31 Actual Results Flexible Budget Spending Variances Labor-hours 3,900 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ 66,380 10,350 9,070 2,420 29,720 8,700 2,800 16,010 $ 145,450
