Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are preparedmonthly for each department. The planning budget and flexible budget for the Production Department are based on the followingformulas, where q is the number of labor-hours worked in a month:Cost FormulasDirect laborIndirect laborUtilitiesSuppliesEquipment depreciationFactory rentProperty taxesFactory administration$16.30g$4,600 + $1.80g$5,800 + $0.40g$1,600 + $0.10g$18, 300 + $2.80g$8,000$2,800$13,600 + $0.70gThe Production Department planned to work 4,400 labor-hours in March; however, it actually worked 4,200 labor-hours during themonth. Its actual costs incurred in March are listed below:Actual Cost Incurred in MarchDirect laborIndirect laborUtilitiesSuppliesEquipment depreciationFactory rentProperty taxesFactory administration$ 70,040$ 11,700$ 7,950$ 2,250$ 30,060$ 8,400$ 2,800$ 15,910Required: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 activityvariances.Required 1Required 2Required 3Prepare the Production Department's planning budget for the month.Packaging Solutions CorporationProduction Department Planning BudgetFor the Month Ended March 31Direct laborIndirect laborUtilitiesSuppliesEquipment depreciationFactory rentProperty taxesFactory administrationTotal expense Required 1Required 2Required 3Prepare the Production Department's flexible budget for the month.Packaging Solutions CorporationProduction Department Flexible BudgetFor the Month Ended March 31Direct laborIndirect laborUtilitiesSuppliesEquipment depreciationFactory rentProperty taxesFactory administrationTotal expenseRequired 1Required 2Required 3Prepare the Production Department's flexible budget performance report for March, including both the spending and activityvariances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zerovariance). Input all amounts as positive values.)Packaging Solutions CorporationProduction Department Flexible Budget Performance ReportFor the Month Ended March 31ActualResultsPlanningBudgetFlexibleBudgetLabor-hours4,200Direct labor70,040Indirect labor11,700Utilities7,950Supplies2,250Equipment depreciation30,060Factory rent8,400Property taxes2,800Factory administration15,910Total expense149,110

1. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended…

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 $4,600 + $1.80q $5,800 + $0.40q $1,600 + $0.10q $18,300 + $2.80q $8,000 $2,800 $13,600 + $0.70q Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 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 $ 70,040 $ 11,700 $ 7,950 $ 2,250 $ 30,060 $ 8,400 $ 2,800 $ 15,910 Direct labor Indirect labor Utilities Supplies Equipment depreciation 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. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q