Question

In: Accounting

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

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 $4,700 + $1.60q
Utilities $5,600 + $0.70q
Supplies $1,300 + $0.30q
Equipment depreciation $18,600 + $2.50q
Factory rent $8,400
Property taxes $2,900
Factory administration $13,400 + $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 $ 10,600
Utilities $ 8,930
Supplies $ 2,770
Equipment depreciation $ 28,600
Factory rent $ 8,800
Property taxes $ 2,900
Factory administration $ 15,570

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.

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Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.30q Indirect labor $4,500 + $1.40q Utilities $5,400 + $0.60q Supplies $1,200 + $0.20q Equipment depreciation $18,300 + $2.90q Factory rent $8,100 Property taxes $2,400 Factory administration $13,000 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.30q Indirect labor $4,700 + $1.90q Utilities $5,300 + $0.40q Supplies $1,300 + $0.20q Equipment depreciation $18,500 + $2.70q Factory rent $8,500 Property taxes $2,700 Factory administration $13,300 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $4,400 + $1.40q Utilities $5,600 + $0.60q Supplies $1,600 + $0.30q Equipment depreciation $18,700 + $2.80q Factory rent $8,400 Property taxes $2,800 Factory administration $13,300 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.30q Indirect labor $4,700 + $1.40q Utilities $5,400 + $0.80q Supplies $1,800 + $0.30q Equipment depreciation $18,600 + $2.40q Factory rent $8,100 Property taxes $2,400 Factory administration $13,300 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.50q Indirect labor $4,200 + $1.40q Utilities $5,200 + $0.40q Supplies $1,300 + $0.10q Equipment depreciation $18,400 + $2.80q Factory rent $8,300 Property taxes $2,800 Factory administration $13,300 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $4,100 + $1.50q Utilities $5,000 + $0.30q Supplies $1,200 + $0.40q Equipment depreciation $18,600 + $2.40q Factory rent $8,000 Property taxes $2,500 Factory administration $13,300 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $4,400 + $1.70q Utilities $5,500 + $0.30q Supplies $1,800 + $0.40q Equipment depreciation $18,600 + $2.40q Factory rent $8,100 Property taxes $2,500 Factory administration $13,100 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.10q Indirect labor $4,100 + $2.00q Utilities $5,800 + $0.30q Supplies $1,700 + $0.30q Equipment depreciation $18,600 + $2.50q Factory rent $8,500 Property taxes $2,800 Factory administration $13,100 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.60q Indirect labor $4,600 + $1.60q Utilities $5,700 + $0.90q Supplies $1,200 + $0.20q Equipment depreciation $18,800 + $2.90q Factory rent $8,100 Property taxes $2,500 Factory administration $13,200 +...
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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 $16.30q Indirect labor $4,500 + $1.60q Utilities $5,300 + $0.70q Supplies $1,200 + $0.10q Equipment depreciation $18,100 + $2.90q Factory rent $8,100 Property taxes $2,700 Factory administration $13,700 +...
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