Question

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 $16.209 $4,800 + $2.000 $5,200 + $0.609 $1,500 + $0.109 $18,300 + $2.709 $8,400 $2,900 $13,200 + $0.800 The Production Department planned to work 4,400 labor-hours in March; however, it actually worked 4,200 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 $ 69,600 $ 12,780 $ 8,230 $ 2,150 $ 29,640 $ 8,800 $ 2,900 $ 15,950 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.

Answer 1

Solution 1 and 2:

В C E F G 1 3. Packaging Solution Corporation Production department planning budget For the month ended March 31 4 5 6 Particulars Amount Labor Hours 4400 8 $71,280.00 $13,600.00 $7,840.00 $1,940.00 $30,180.00 $8,400.00 $2,900.00 $16,720.00 $152,860.00 Direct labor (4400*$16.20) Indirect labor ($4800 + 4400*$2.00) Utilities ($5200 4400*$0.60) Supplies ($1500 4400*$0.10) Equipment Depreciation ($18300+4400*$2.70) Factory Rent Property tax Factory Administration ($13200 + 4400*$0.80) Total expense 10 11 12 13 14 15 16 17 18 Packaging Solution Corporation Production department flexible budget 19 20 21 For the month ended March 31 22 Particulars Amount 4200 Labor Hours 23 24 $68,040.00 $13,200.00 Direct labor (4200*$16.20) Indirect labor ($4800 4200*$2.00) Utilities ($5200 + 4200*$0.60) Supplies ($1500+ 4200*$0.10) Equipment Depreciation ($18300+4200*$2.70) Factory Rent Property tax Factory Administration ($13200 + 4200*$0.80) Total expense 25 26 $7,720.00 27 $1,920.00 $29,640.00 28 29 $8,400.00 $2,900.00 $16,560.00 $148,380.00 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Sheet1140 Sheet689 Sheet690 Sheet691 She

Solution 3:

Н J К M N CT 14 15 16 17 18 Packaging Solution Corporation Flexible Budget Performance Report For the month ended March 31 19 20 21 Revenue and spending Flexible Budget Planning Budget Activity Variances 22. Particulars Actual Results variances 4400 23 Labor Hours 4200 4200 24 $68,040.00$3,240.00 F 25 Direct labor $69,600.00 $1,560.00 U $420.00 F $510.00 U $230.00 U $0.00 None $400.00 U $0.00 None $610.00 F $1,670.00 U $71,280.00 26 Indirect labor $400.00 F $120.00 F $20.00 F $540.00 F $0.00 None $12,780.00 $13,200.00 $13,600.00 27 Utilities $8,230.00 $7,720.00 $7,840.00 28 Supplies 29 Equipment Depreciation $2,150.00 $29,640.00 $1,920.00 $1,940.00 $29,640.00 $30,180.00 30 Factory Rent $8,800.00 $8,400.00 $8,400.00 $2,900.00 $15,950.00 $150,050.00 31 Property tax 32 Factory Administration 33 Total expense $0.00 None $2,900.00 $2,900.00 $16,720.00 $160.00 F $16,560.00 $148,380.00 $4,480.00 F $152,860.00 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62. 63 64 65 66 67 68 69 70 Sheet1140 Sheet689 Sheet690 Sheet691 She O