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:
Cost Formulas | |
Direct labor | $15.80q |
Indirect labor | $8,200 + $1.60q |
Utilities | $6,400 + $0.80q |
Supplies | $1,100 + $0.40q |
Equipment depreciation | $23,000 + $3.70q |
Factory rent | $8,400 |
Property taxes | $2,100 |
Factory administration | $11,700 + $1.90q |
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:
Actual Cost Incurred in March | |||
Direct labor | $ | 134,730 | |
Indirect labor | $ | 19,860 | |
Utilities | $ | 14,570 | |
Supplies | $ | 4,980 | |
Equipment depreciation | $ | 54,080 | |
Factory rent | $ | 8,700 | |
Property taxes | $ | 2,100 | |
Factory administration | $ | 26,470 | |
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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1 | Packaging solutions corporations | ||||
Production department planning Budget | |||||
For the month ended March 31 | |||||
Labor - hours | q | 8,000 | |||
Direct labor | $15.80 q | $1,26,400 | |||
Indirect labor | [$8200 + ($1.60 X q)] | $ 21,000 | |||
Utilities | [$6400+ ($0.80 X q)] | $ 12,800 | |||
Supplies | [$1,100 + ($0.40 X q)] | $ 4,300 | |||
Equipment depreciation | [$23000 + ($3.70 X q)] | $ 52,600 | |||
Factory Rent | $ 8,400 | $ 8,400 | |||
Property taxes | $ 2,100 | $ 2,100 | |||
Factory administration | [$11700 + ($1.90 X q)] | $ 26,900 | |||
Total expense | $2,54,500 | ||||
2 | Packaging solutions corporations | ||||
Production department flexible Budget | |||||
For the month ended March 31 | |||||
Labor - hours | q | 8,400 | |||
Direct labor | $15.80 q | $1,32,720 | |||
Indirect labor | [$8200 + ($1.60 X q)] | $ 21,640 | |||
Utilities | [$6400+ ($0.80 X q)] | $ 13,120 | |||
Supplies | [$1,100 + ($0.40 X q)] | $ 4,460 | |||
Equipment depreciation | [$23000 + ($3.70 X q)] | $ 54,080 | |||
Factory Rent | $ 8,400 | $ 8,400 | |||
Property taxes | $ 2,100 | $ 2,100 | |||
Factory administration | [$11700 + ($1.90 X q)] | $ 27,660 | |||
Total expense | $2,64,180 | ||||
3 | Packaging solutions corporations | ||||
Production department flexible Budget performance report | |||||
For the month ended March 31 | |||||
Actual results | Spending Variances | Flexible Budget | |||
Labor - hours | 8,400 | 8,400 | |||
Direct labor | $ 1,34,730 | $ 2,010 | U | $1,32,720 | |
Indirect labor | $ 19,860 | $ 1,780 | F | $ 21,640 | |
Utilities | $ 14,570 | $ 1,450 | U | $ 13,120 | |
Supplies | $ 4,980 | $ 520 | U | $ 4,460 | |
Equipment depreciation | $ 54,080 | $ - | None | $ 54,080 | |
Factory Rent | $ 8,700 | $ 300 | U | $ 8,400 | |
Property taxes | $ 2,100 | $ - | None | $ 2,100 | |
Factory administration | $ 26,470 | $ 1,190 | F | $ 27,660 | |
Total expense | $ 2,65,490 | $ 1,310 | U | $2,64,180 |
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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: Cost Formulas Direct labor $15.80q Indirect labor $8,200 + $1.60q Utilities $6,400 + $0.80q Supplies $1,100 + $0.40q Equipment depreciation $23,000 + $3.70q Factory rent $8,400 Property taxes $2,100 Factory administration $11,700 +...
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: Cost Formulas $15.80q $8,200 $1.60g $6,400 $0.80q $1,100 $0.40q $23,000 $3.70g $8,400 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $2,100 $11,700$1.90g The Production Department planned to...
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: Cost Formulas Direct labor $16.30q Indirect labor $4,800 + $1.90q Utilities $5,100 + $0.80q Supplies $1,600 + $0.20q Equipment depreciation $18,200 + $2.60q Factory rent $8,300 Property taxes $2,500 Factory administration $13,700 +...
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: Cost Formulas Direct labor $16.30q Indirect labor $4,500 + $2.10q Utilities $5,100 + $0.70q Supplies $1,800 + $0.20q Equipment depreciation $18,800 + $2.60q Factory rent $8,000 Property taxes $3,000 Factory administration $13,300 +...
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: Cost Formulas Direct labor $16.10q Indirect labor $4,400 + $1.60q Utilities $5,500 + $0.70q Supplies $1,400 + $0.20q Equipment depreciation $18,400 + $2.80q Factory rent $8,200 Property taxes $2,800 Factory administration $13,500 +...
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: Cost Formulas Direct labor $16.10q Indirect labor $4,200 + $1.60q Utilities $5,700 + $0.50q Supplies $1,300 + $0.10q Equipment depreciation $18,200 + $2.90q Factory rent $8,000 Property taxes $2,700 Factory administration $13,300 +...
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: Cost Formulas Direct labor $16.60q Indirect labor $4,400 + $1.50q Utilities $5,700 + $0.70q Supplies $1,400 + $0.40q Equipment depreciation $18,700 + $2.40q Factory rent $8,100 Property taxes $2,600 Factory administration $13,700 +...
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: Cost Formulas Direct labor $16.30q Indirect labor $4,600 + $1.50q Utilities $5,500 + $0.80q Supplies $1,300 + $0.10q Equipment depreciation $18,300 + $2.80q Factory rent $8,200 Property taxes $2,700 Factory administration $13,300 +...
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: Cost Formulas Direct labor $16.10q Indirect labor $4,300 + $1.70q Utilities $5,400 + $0.80q Supplies $1,300 + $0.20q Equipment depreciation $18,600 + $2.50q Factory rent $8,100 Property taxes $2,600 Factory administration $13,600 +...
Packaging Solutions Corporation manufactures and a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget an lexible budget for the Production Department are based on the following formulas, where 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 $15.80 $8,200 + $1.600 $6,400 + $0.80 $1,100 + $0.40 $23,000 - $3.789 $8.400 $2,100 $11,700 + $1.909 The...