Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are...
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Accounting
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 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 $ 67,200 Indirect labor $ 11,880 Utilities $ 7,590 Supplies $ 2,350 Equipment depreciation $ 30,400 Factory rent $ 8,700 Property taxes $ 2,500 Factory administration $ 15,570
Required: 1. Prepare the Production Departments planning budget for the month.
2. Prepare the Production Departments flexible budget for the month.
3. Prepare the Production Departments flexible budget performance report for March, including both the spending and activity variances.
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