Triway Packaging Corporation manufactures and sells a wide variety of packaging
ID: 2457041 • Letter: T
Question
Triway Packaging 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 direct labor-hours worked in a month:
Direct labor
$
16.50
q
Indirect labor
$
4,400
+
$
2.00
q
Utilities
$
5,500
+
$
0.80
q
Supplies
$
1,300
+
$
0.30
q
Equipment depreciation
$
18,600
+
$
2.50
q
Factory rent
$
8,500
Property taxes
$
2,400
Factory administration
$
13,400
+
$
0.70
q
The actual costs incurred in November in the Production Department are listed below:
Actual Cost Incurred
in November
Direct labor
$
67,620
Indirect labor
$
11,980
Utilities
$
9,250
Supplies
$
2,770
Equipment depreciation
$
28,600
Factory rent
$
8,900
Property taxes
$
2,400
Factory administration
$
15,570
Required:
1.
The company had budgeted for an activity level of 4,200 labor-hours in November. Complete the Production Department’s planning budget for the month.
Triway Packaging Corporation
Production Department Planning Budget
For the Month Ended November 30
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Total expense
2.
The company actually worked 4,000 labor-hours in November. Complete the Production Department’s flexible budget for the month.
Triway Packaging Corporation
Production Department Flexible Budget
For the Month Ended November 30
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Total expense
3.
Complete the Production Department’s flexible budget performance report for November, including both the activity and spending variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Triway Packaging Corporation
Production Department Flexible Budget Performance Report
For the Month Ended November 30
Activity Variances
Spending Variances
Direct labor
Indirect labor
Utilities
Supplies
Equipment depreciation
Factory rent
Property taxes
Factory administration
Total expense
Triway Packaging 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 direct labor-hours worked in a month:
Explanation / Answer
Triway Packaging Corporation
Triway Packaging Corporation
Production Department Planning Budget For the Month Ended November 30 Direct labor 69300 Indirect labor 12800 Utilities 8860 Supplies 2560 Equipment depreciation 29100 Factory rent 8500 Property taxes 2400 Factory administration 16340 Total expense 149860 Triway Packaging Corporation Production Department Flexible Budget For the Month Ended November 30 Direct labor 66000 Indirect labor 12400 Utilities 8700 Supplies 2500 Equipment depreciation 28600 Factory rent 8500 Property taxes 2400 Factory administration 16200 Total expense 145300 Triway Packaging Corporation Revenue and Spending Variances For the Month Ended November 30 Flexible Actual Revenue and Spending Budget Results Variances Direct labor 66000 67620 -1620 U Indirect labor 12400 11980 420 F Utilities 8700 9250 -550 U Supplies 2500 2770 -270 U Equipment depreciation 28600 28600 0 None Factory rent 8500 8900 -400 U Property taxes 2400 2400 0 None Factory administration 16200 15570 630 F Total expense 145300 147090 -1790 URelated Questions
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