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EXERCISE 9-16 Floxibl. Budgets in a Cost Conter L09-10, L09-20 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 $15.809 $8,200 + $ 1.600 $6,400 - $0.800 $ 1100 + $0.400 $23,000 - $3.700 $8,400 $ 2,100 $11700+ $1909 Page 431 The Production Department planned to work 8,000 iabor-hours in March: however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below ho Actual Cost Incurred in March Direct labor $ 134,730 Indirect labor $ 19,860 $ 14,570 Supplies $4.980 Equipment depreciation $54080 Factory rent 58.700 Property taxes $2,100 Factory administration $ 26,470 Uulites Required: 1 Using Exhibit 9-2@ as your guide, prepare the Production Department's planning budget for the month 2. Uning Exhibit 9-5 as your guide prepare the Production Departments flexible budget for the month Blata thamandinn allantom Hit D. Fwhibit Factory rent Property taxes Factory administration $8,400 $2,100 $11,700 + $ 1909 The Production Department planned to work 8.000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 134,730 $ 19,860 $ 14,570 $4,980 $54,080 $8,700 $2,100 $ 26,470 Required: 1. Using Exhibit 9-2 as your guide prepare the Production Department's planning budget for the month. 2. Using Exhibit 9-5 @ as your guide, prepare the Production Department's flexible budget for the month 3 Calculate the spending variances for all expense items. (Hint: Refer to Exhibit 9-6 g.)

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