ackaging 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 ormulas, where q is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies. Equipment depreciation. Factory rent Property taxes. Factory administration Cost Formulas Direct labor Indirect labor Utilities Supplies. Equipment depreciation Factory rent Property taxes Factory administration $16.10q $4,600+ $1.70q $5,000+ $0.50q $1,700+ $0.30q $18,700+ $2.809 $8,300 $3,000 $13,400+ $0.60q The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 64,330 $ 10,750 $ 7,440 $ 3,140 $ 29,620 $8,700 $3,000 $ 15,090 Required: 1. Prepare the Production Department's planning budget for the month. 2 Prepare the Production Department's flexible budget for the month

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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
Supplies
Equipment depreciation.
Factory rent
Property taxes
Factory administration
Cost Formulas
$16.10q
$4,600+ $1.70q
$5,000+ $0.509
$1,700+ $0.30q
$18,700+ $2.80q
$8,300
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
$3,000
$13,400+ $0.60q
The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the
month. Its actual costs incurred in March are listed below:
Actual Cost
Incurred in
March
$ 64,330
$ 10,750
$ 7,440
$ 3,140
$ 29,620
$ 8,700
$3,000
$ 15,090
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.
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 Supplies Equipment depreciation. Factory rent Property taxes Factory administration Cost Formulas $16.10q $4,600+ $1.70q $5,000+ $0.509 $1,700+ $0.30q $18,700+ $2.80q $8,300 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $3,000 $13,400+ $0.60q The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 64,330 $ 10,750 $ 7,440 $ 3,140 $ 29,620 $ 8,700 $3,000 $ 15,090 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.
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