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 $16.50q Direct labor Indirect labor Utilities $4,000+ $1.30q $5,300 + $0.80q Supplies $1,200+ $0.309 Equipment depreciation $18,600 + $2.90q Factory rent $8,500 Property taxes $2,700 $13,400 $0.809 Factory administration The Production Department planned to work 4,500 labor-hours in March; however, it actually worked 4,300 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Actual Cost Incurred in March $ 72,570 $ 9,030 $ 9,290 Supplies $ 2,760 Equipment depreciation $ 31,070 $ 8,900 $ 2,700 $ 16,230 Factory rent Property taxes Factory administration 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31
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 $16.50q Direct labor Indirect labor Utilities $4,000+ $1.30q $5,300 + $0.80q Supplies $1,200+ $0.309 Equipment depreciation $18,600 + $2.90q Factory rent $8,500 Property taxes $2,700 $13,400 $0.809 Factory administration The Production Department planned to work 4,500 labor-hours in March; however, it actually worked 4,300 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Actual Cost Incurred in March $ 72,570 $ 9,030 $ 9,290 Supplies $ 2,760 Equipment depreciation $ 31,070 $ 8,900 $ 2,700 $ 16,230 Factory rent Property taxes Factory administration 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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:
Cost Formulas
$16.50q
Direct labor
Indirect labor
Utilities
$4,000+ $1.30q
$5,300 + $0.80q
Supplies
$1,200+ $0.309
Equipment depreciation
$18,600 + $2.90q
Factory rent
$8,500
Property taxes
$2,700
$13,400 $0.809
Factory administration
The Production Department planned to work 4,500 labor-hours in March; however, it
actually worked 4,300 labor-hours during the month. Its actual costs incurred in March
are listed below:
Direct labor
Indirect labor
Utilities
Actual Cost
Incurred in
March
$ 72,570
$ 9,030
$ 9,290
Supplies
$ 2,760
Equipment depreciation
$ 31,070
$ 8,900
$ 2,700
$ 16,230
Factory rent
Property taxes
Factory administration
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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Prepare the Production Department's planning budget for the month.
Packaging Solutions Corporation
Production Department Planning Budget
For the Month Ended March 31
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