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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 q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.30g $4,600 + $1.80g $5,800 + $0.40g $1,600 + $0.10g $18,300 + $2.80g $8,000 Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $2,800 $13,600 + $e.70g 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: Actual Cost Incurred in March $ 70,040 $ 11,700 $ 7,950 $ 2,250 $ 30,060 $ 8,400 $ 2,800 $ 15,910 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. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Actual labor-hours 4,400 Direct labor 71,720 Indirect labor 12,520 O Utilities 7,560 Supplies 2,040 Equipment depreciation 30,320 Factory rent 8,000 Property taxes 2,800 Factory administration 16,680 Total expense $ 151,640

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 $16.30g $4,600 + $1.80g $5,800 + $0.40g $1,600 + $0.10g $18,300 + $2.80g $8,000 Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $2,800 $13,600 + $e.70g 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: Actual Cost Incurred in March $ 70,040 $ 11,700 $ 7,950 $ 2,250 $ 30,060 $ 8,400 $ 2,800 $ 15,910 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. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Actual labor-hours 4,400 Direct labor 71,720 Indirect labor 12,520 O Utilities 7,560 Supplies 2,040 Equipment depreciation 30,320 Factory rent 8,000 Property taxes 2,800 Factory administration 16,680 Total expense $ 151,640

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 16E: Thomas Textiles Corporation began November with a budget for 60,000 hours of production in the...
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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 q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.30g $4,600 + $1.80q $5,800 + $0.40g $1,600 + $0.10g $18,300 + $2.80g $8,000 $2,800 $13,600 + $0.70g Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 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: Actual Cost Incurred in March $ 70,040 $ 11,700 $ 7,950 $ 2,250 $ 30,060 $ 8,400 $ 2,800 $ 15,910 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. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Actual labor-hours 4,400 O Direct labor $ 71,720 Indirect labor 12,520 Utilities 7,560 Supplies 2,040 Equipment depreciation 30,320 X Factory rent 8,000 Property taxes 2,800 Factory administration 16,680 Total expense 151,640
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 q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.30g $4,600 + $1.80q $5,800 + $0.40g $1,600 + $0.10g $18,300 + $2.80g $8,000 $2,800 $13,600 + $0.70g Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 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: Actual Cost Incurred in March $ 70,040 $ 11,700 $ 7,950 $ 2,250 $ 30,060 $ 8,400 $ 2,800 $ 15,910 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. Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Actual labor-hours 4,400 O Direct labor $ 71,720 Indirect labor 12,520 Utilities 7,560 Supplies 2,040 Equipment depreciation 30,320 X Factory rent 8,000 Property taxes 2,800 Factory administration 16,680 Total expense 151,640
Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Actual labor-hours 4,200 Direct labor 68,460 Indirect labor 12,160 Utilities 7,480 O Supplies 2,020 Equipment depreciation 29,760 X Factory rent 8,000 Property taxes 2,800 Factory administration 16,540 Total expense $ 147,220 Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Packaging Solutions Corporation Production Department Flexible Budget Performance Report For the Month Ended March 31 Spending Variances Flexible Budget 4,200 O Activity Variances Planning Budget 4,400 O Actual Results Labor-hours 4,200 Direct labor S 70,040 $ 1,580 OU Os 68,460 $ 3,260 O F Os 71,720 O Indirect labor 11,700 460 O F 12,160 O 360 O F 12,520 O Utilities 7,950 470 O U 7,480 O 80 O F 7,560 O Supplies Equipment depreciation 2,250 230 OU 2,020 O 20 OF 2,040 O 30,060 300 XU 29,760 X 560 OF 30,320 x Factory rent 8,400 400 Ou 8,000 O 0O None 8,000 O Property taxes 2,800 0O None 2,800 O 0 O None V 2,800 O Factory administration 15,910 630 O F 16,540 O 140 O F 16,680 O Total expense S 149,110 $ 1,890 Xu O $147,220 x $ 4,420 O F $ 151,640 X
Transcribed Image Text:Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Actual labor-hours 4,200 Direct labor 68,460 Indirect labor 12,160 Utilities 7,480 O Supplies 2,020 Equipment depreciation 29,760 X Factory rent 8,000 Property taxes 2,800 Factory administration 16,540 Total expense $ 147,220 Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget performance report for March, including both the spending and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Packaging Solutions Corporation Production Department Flexible Budget Performance Report For the Month Ended March 31 Spending Variances Flexible Budget 4,200 O Activity Variances Planning Budget 4,400 O Actual Results Labor-hours 4,200 Direct labor S 70,040 $ 1,580 OU Os 68,460 $ 3,260 O F Os 71,720 O Indirect labor 11,700 460 O F 12,160 O 360 O F 12,520 O Utilities 7,950 470 O U 7,480 O 80 O F 7,560 O Supplies Equipment depreciation 2,250 230 OU 2,020 O 20 OF 2,040 O 30,060 300 XU 29,760 X 560 OF 30,320 x Factory rent 8,400 400 Ou 8,000 O 0O None 8,000 O Property taxes 2,800 0O None 2,800 O 0 O None V 2,800 O Factory administration 15,910 630 O F 16,540 O 140 O F 16,680 O Total expense S 149,110 $ 1,890 Xu O $147,220 x $ 4,420 O F $ 151,640 X
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