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 Cost Formulas $16.60g $4,700 +$1.80g $5,800 + $0.50g $18,700+ $2.40g Supplies $1,700 +$0.20g Equipment depreciation Factory rent Property taxes Factory administration $8,600 $2,800 $13,300 + $0.70g The Production Department planned to work 4,000 labor-hours in March; however, it actually worked 3,800 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 Actual Cost Incurred in March $ 64,720 $ 11,080 $ 8,190 $ 2,710 $27,820 $ 9,000 $ 2,800 $ 15,330 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. 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 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ Required Required 2 >
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 Cost Formulas $16.60g $4,700 +$1.80g $5,800 + $0.50g $18,700+ $2.40g Supplies $1,700 +$0.20g Equipment depreciation Factory rent Property taxes Factory administration $8,600 $2,800 $13,300 + $0.70g The Production Department planned to work 4,000 labor-hours in March; however, it actually worked 3,800 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 Actual Cost Incurred in March $ 64,720 $ 11,080 $ 8,190 $ 2,710 $27,820 $ 9,000 $ 2,800 $ 15,330 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. 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 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ Required Required 2 >
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
Cost Formulas
$16.60g
$4,700 +$1.80g
$5,800 + $0.50g
$18,700+ $2.40g
Supplies
$1,700 +$0.20g
Equipment depreciation
Factory rent
Property taxes
Factory administration
$8,600
$2,800
$13,300 + $0.70g
The Production Department planned to work 4,000 labor-hours in March; however, it actually worked 3,800 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
Actual Cost Incurred in March
$ 64,720
$ 11,080
$ 8,190
$ 2,710
$27,820
$ 9,000
$ 2,800
$ 15,330
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.
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
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Total expense
$
Required
Required 2 >
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