a month Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.300 $4,300 +$1.500 $5,300-50.400 $1,400 +$0.300 $18,200 $2.700 $8,400 $2,600 $13,800+$0.600 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. Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Required: Actual Cost Incurred in March $ 66,780 $ 9,780 $ 7,370 $ 2.870 $ 29,000 $ 8,800 $ 2,600 $ 15,550 1. Prepare the Production Department's planning budget for the month 2. Prepare the Production Department's flexible budget for the month. 3. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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
a month Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.300 $4,300 +$1.500 $5,300-50.400 $1,400 +$0.300 $18,200 $2.700 $8,400 $2,600 $13,800+$0.600 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. Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Required: Actual Cost Incurred in March $ 66,780 $ 9,780 $ 7,370 $ 2.870 $ 29,000 $ 8,800 $ 2,600 $ 15,550 1. Prepare the Production Department's planning budget for the month 2. Prepare the Production Department's flexible budget for the month. 3. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text: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:
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Cost Formulas
$16.30q
$4,300 +$1.50g
$5,300 +$0.40g
$1.400+ $0.30q
$18,200+ $2.70g
$8,400
$13,800+ $0.60g
$2,600
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:
Direct labor
Actual Cost Incurred in March
$ 66,780
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Required:
$
9,780
$ 7,370
$ 2,870
$ 29,000
$ 8.800
$ 2,600
$ 15,550
1. Prepare the Production Department's planning budget for the month.
2. Prepare the Production Department's flexible budget for the month.
3. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
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.)
Labor-hours
Packaging Solutions Corporation
Production Department Flexible Budget Performance Report
For the Month Ended March 31
Actual
Results
Flexible
Budget
4,000
Direct labor
$
66,780
Indirect labor
9,780
Utilities
7,370
Supplies
2,870
Equipment depreciation
29,000
Factory rent
8,800
Property taxes
Factory administration
Total expense
2,600
15,550
$ 142,750
Planning
Budget
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