Packaging Solutions Corporation manufactures and sells a wide variety of packagi
ID: 2346844 • Letter: P
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: The actual costs incurred in March in the Production Department are listed below: The company had budgeted for an activity level of 10,000 labor-hours in March. Prepare the Production Department's planning budget for the month. (Input all amounts as positive values. Omit the "$" sign in your response.) The company actually worked 9,500 labor-hours in March. Prepare the Production Department's flexible budget for the month. (Input all amounts as positive values. Omit the "$" sign in your response.) Prepare the Production Department's flexible budget performance report for March, including both the activity and spending variances. (Leave no cells blank - be certain to enter "0" wherever required. 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. Omit the "$" sign in your response.)Explanation / Answer
Hi, Please find calculations as follows: Activity Variances: Direct labor -6,900 F Indirect labor -800 F Utilities -350 F Supplies -200 F Equipment depreciation -950 F Factory rent -1100 F Property taxes 0 None Factory administration -850 F Total Expense -10,050 F Spending Variances: Direct labor 1630 U Indirect labor -3340 F Utilities 1220 U Supplies 1310 U Equipment depreciation 0 None Factory rent 0 None Property taxes 0 None Factory administration -7930 F Total Expense -7110 F Please let me know if the answers are right. Thanks, Aman
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