Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...

	Cost Formulas
Direct labor	$16.20q
Indirect labor	$4,200 + $1.90q
Utilities	$5,300 + $0.80q
Supplies	$1,600 + $0.40q
Equipment depreciation	$18,700 + $3.00q
Factory rent	$8,100
Property taxes	$2,700
Factory administration	$13,200 + $0.90q

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	$	66,360
Indirect labor	$	11,360
Utilities	$	9,050
Supplies	$	3,490
Equipment depreciation	$	30,700
Factory rent	$	8,500
Property taxes	$	2,700
Factory administration	$	16,210

Required:

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

2. Prepare the Production Department’s flexible budget for the month.

3. Calculate the spending variances for all expense items.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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