Packaging Solutions Corporation manufactures and sells a wide varlety 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 qis the number of labor-hours worked in a month: Cost Formulas Direct labor Indirect labor Utilities Supplies Equipnent depreciation Factory rent Property taxes Factory adeinistration $16. 60g $4, 200 $1.60g $5,300+ $0.70g $1,700 + $0.30g $18, 500. $2.90g $8,300 $2,500 $13,100 s0.80g The Production Department planned to work 4,100 labor-hours in March: however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 66, 380 $ 9,940 $ 8,560 $ 3,140 $ 29,810 $ 8,700 $ 2,500 $ 15,610 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 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 varlances for all expense items.
Packaging Solutions Corporation manufactures and sells a wide varlety 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 qis the number of labor-hours worked in a month: Cost Formulas Direct labor Indirect labor Utilities Supplies Equipnent depreciation Factory rent Property taxes Factory adeinistration $16. 60g $4, 200 $1.60g $5,300+ $0.70g $1,700 + $0.30g $18, 500. $2.90g $8,300 $2,500 $13,100 s0.80g The Production Department planned to work 4,100 labor-hours in March: however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 66, 380 $ 9,940 $ 8,560 $ 3,140 $ 29,810 $ 8,700 $ 2,500 $ 15,610 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 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 varlances for all expense items.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 63E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
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![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 qis the number of labor-hours worked in a month:
Cost Formulas
$16.60g
$4, 200 + $1.60g
$5,300 + $0.70g
$1,700 + $0.30g
$18,500 $2.90g
$8, 300
$2,500
$13,100 + $0.80g
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory adeinistration
The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the
month. Its actual costs incurred in March are listed below:
Direct labor
Indirect labor
Utilities
Supplies
Equipnent depreciation
Factory rent
Property taxes
Factory administration
Actual Cost Incurred in March
$ 66,380
$ 9,940
$ 8,560
$ 3,140
$ 29,810
$ 8,700
$2,500
$ 15,610
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 varlances for all expense items.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a0c2d30-3822-4bfd-a3b5-ad1a2e388a31%2Fdfb387dd-b945-4ede-8e27-6c902766592c%2Fcgsgwvr_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 qis the number of labor-hours worked in a month:
Cost Formulas
$16.60g
$4, 200 + $1.60g
$5,300 + $0.70g
$1,700 + $0.30g
$18,500 $2.90g
$8, 300
$2,500
$13,100 + $0.80g
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory adeinistration
The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the
month. Its actual costs incurred in March are listed below:
Direct labor
Indirect labor
Utilities
Supplies
Equipnent depreciation
Factory rent
Property taxes
Factory administration
Actual Cost Incurred in March
$ 66,380
$ 9,940
$ 8,560
$ 3,140
$ 29,810
$ 8,700
$2,500
$ 15,610
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 varlances for all expense items.
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