Packaging Solutions Corporation manufactures and sells a wid

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

The actual costs incurred in March in the Production Department are listed below:

The company had budgeted for an activity level of 4,400 labor-hours in March. Complete the Production Department’s planning budget for the month.

The company actually worked 4,200 labor-hours in March. Complete the Production Department’s flexible budget for the month.

Calculate the spending variances for all expense items. (Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Input all amounts as positive values.)

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 $16.60q Indirect Labor 4700+2.00q Utilities 5300+0.80q Supplies 1300+0.20q Equipment depreciation 18700+3.10q Factory Rent 8300 Property Taxes 2700 Factory Administration 13300+0.80q The actual costs incurred in March in the Production Department are listed below: Actual Cost Incurred in March Direct Labor $71360 Indirect Labor 12680 Utilities 9210 Supplies 2390 Equipment Depreciation 31720 Factory Rent 8700 Property Taxes 2700 Factory Administration 16050 Required: 1. The company had budgeted for an activity level of 4,400 labor-hours in March. Complete the Production Department’s planning budget for the month. 2. The company actually worked 4,200 labor-hours in March. Complete the Production Department’s flexible budget for the month. 3. Calculate the spending variances for all expense items. (Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Input all amounts as positive values.)

Solution

Equation given Planning Actual Flexible Spending Variane Labour Hour 4400 Hour 4200 Hour 4200 Hour Direct Labour $16.60q 73040 71360 69720 1640 U Indiret Labour 4700+2q 13500 12680 13100 -420 F Utilities 5300+0.80q 8820 9210 8660 550 U Supplies 1300+0.20q 2180 2390 2140 250 U Equipment Depreciation 18700+3.10q 32340 31720 31720 0 None Factory Rent 8300 8300 8700 8300 400 U property Taxes 2700 2700 2700 2700 0 None Factory Administration 13300+0.80q 16820 16050 16660 -610 F Total Expense 157700 154810 153000 1810 U