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Business, 05.05.2020 22:42 tilievaughn14
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 $16.50q
Indirect labor $4,400 + $1.70q
Utilities $5,500 + $0.40q
Supplies $1,700 + $0.30q
Equipment depreciation $18,800 + $2.90q
Factory rent $8,500
Property taxes $2,400
Factory administration $13,200 + $0.50q
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 $69,700
Indirect labor $12,480
Utilities $7,310
Supplies $3,200
Equipment depreciation $28,850
Factory rent $8,700
Property taxes $2,900
Factory administration $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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Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Perform...
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