Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Its Production Department's planningbudget and flexible budget are based on the following formulas, where q is the number of labor-hours worked in a month:Direct laborIndirect laborUtilitiesSuppliesEquipment depreciationFactory rentProperty taxesFactory administrationDirect laborIndirect laborUtilitiesSuppliesEquipment depreciationCost Formulas$16.309$4,200+ $1.809$5,800+ $0.909$1,800+ $0.109The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during themonth. Its actual costs incurred in March are listed below:Factory rentProperty taxesFactory administration$18,600 + $2.609$8,100$2,800$13,300 + $0.709Actual CostIncurred inMarch$ 66,780$ 10,940$ 9,970$ 2,430$ 29,000$ 8,500$ 2,800$ 15,470Required:1. Prepare the Production Department's planning budget for the month.

Lets understand the basics.Budget is prepared by management in order to calculate estimates for…

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Its Production Department's planning budget and flexible budget 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 $16.309 $4,200+ $1.809 $5,800 + $0.909 $1,800+ $0.109 $18,600+ $2.609 $8,100 $2,800 $13,300+ $0.709 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

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Its Production Department's planning budget and flexible budget 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 $16.309 $4,200+ $1.809 $5,800 + $0.909 $1,800+ $0.109 $18,600+ $2.609 $8,100 $2,800 $13,300+ $0.709 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $4,000 + $1.40q Utilities $5,300 + $0.30q Supplies $1,600 + $0.10q Equipment depreciation $18,500 + $3.00q Factory rent $8,200 Property taxes $2,500 Factory administration $13,600 + $0.60q 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: Actual Cost Incurred in March Direct labor $ 70,480 Indirect labor $ 9,340 Utilities $ 7,010 Supplies $ 2,250 Equipment depreciation $ 31,100 Factory rent $ 8,600 Property taxes $ 2,500 Factory…
Geovanni Inc. uses standard costs to prepare its flexible budget. Standard and actual costs data for manufacturing overhead for producing 5,000 units of product are as follows: Standard and actual costs data for manufacturing overhead Costs Rate Allocation base per unit Variable overhead $8 per direct labor hour 2 hours Fixed overhead (based on 12,000 hours at 100% capacity) $3 per direct labor hour 2 hours Actual total overhead costs are as follows: Actual Total Overhead Costs Costs Amounts Total variable overhead costs $58,000 Total fixed overhead costs $20,000 Compute the fixed overhead cost variance. Group of answer choices -$7,000 favorable $10,000 unfavorable -$10,000 favorable $18,000 unfavorable