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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: Direct labor Indirect labor Utilities Cost Formulas $16.10q $4,600 +$1.70q $5,700 + $0.40q Supplies $1,700+ $0.20q Equipment depreciation $18,300+ $2.50q Factory rent $8,200 $3,000 $13,300 + $0.90q Property taxes Factory administration The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $ 67,550 $ 11,090 $ 7,810 $ 2,770 $28,550 $ 8,600 $ 3,000 $16,400 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.

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 $16.10q $4,600 +$1.70q $5,700 + $0.40q Supplies $1,700+ $0.20q Equipment depreciation $18,300+ $2.50q Factory rent $8,200 $3,000 $13,300 + $0.90q Property taxes Factory administration The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $ 67,550 $ 11,090 $ 7,810 $ 2,770 $28,550 $ 8,600 $ 3,000 $16,400 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.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 63E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
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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: Direct labor Cost Formulas $16.10q Indirect labor Utilities $4,600 + $1.70q $5,700 +$0.40q Supplies $1,700+ $0.20q Equipment depreciation $18,300+ $2.50q Factory rent $8,200 Property taxes Factory administration $3,000 $13,300 + $0.90q The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $ 67,550 $ 11,090 $ 7,810 $ 2,770 $28,550 $ 8,600 $ 3,000 $ 16,400 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.
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 Cost Formulas $16.10q Indirect labor Utilities $4,600 + $1.70q $5,700 +$0.40q Supplies $1,700+ $0.20q Equipment depreciation $18,300+ $2.50q Factory rent $8,200 Property taxes Factory administration $3,000 $13,300 + $0.90q The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $ 67,550 $ 11,090 $ 7,810 $ 2,770 $28,550 $ 8,600 $ 3,000 $ 16,400 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.
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