Reference no: EM132735852

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

Indirect labor$4,400 + $1.50q

Utilities$5,600 + $0.80q

Supplies$1,500 + $0.40q

Equipment depreciation$18,000 + $2.40q

Factory rent$8,400

Property taxes$3,000

Factory administration$13,700 + $0.90q

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 March

Direct labor$66,780

Indirect labor$9,880

Utilities$9,350

Supplies$3,390

Equipment depreciation$27,600

Factory rent$8,800

Property taxes$3,000

Factory administration$16,710

Required:

Problem 1. the Production Department's planning budget for the month.

Problem 2. the Production Department's flexible budget for the month.

Problem 3. the spending variances for all expense items.