Reference no: EM133040078

Question - 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 + $1.90q
Utilities	$5,700 + $0.70q
Supplies	$1,400 + $0.20q
Equipment depreciation	$18,300 + $2.70q
Factory rent	$8,200
Property taxes	$2,700
Factory administration	$13,100 + $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	$11,560
Utilities	$9,030
Supplies	$2,450
Equipment depreciation	$29,100
Factory rent	$8,600
Property taxes	$2,700
Factory administration	$16,110

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.