Question

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	$16.20q
Indirect labor	$4,700 + $2.10q
Utilities	$5,400 + $0.50q
Supplies	$1,800 + $0.40q
Equipment depreciation	$18,400 + $2.50q
Factory rent	$8,200
Property taxes	$2,700
Factory administration	$13,300 + $0.90q

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:

Prepare the Production Department’s planning budget for the month.

Required 1

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

Required 2

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 3

Prepare the Production Department’s 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	$69,600
Indirect labor	13,120
Utilities	7,990
Supplies	3,770
Equipment depreciation	28,900
Factory rent	8,600
Property taxes	2,700
Factory administration	16,490
Total expense	$151,170

(Basically just fill in all the blanks)

Thanks for Your Help!

Answer 1

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