Packaging Solutions Corporation manufactures and sells a wide variety of packagi
ID: 2463947 • 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:
Direct labor $ 16.60 q
Indirect labor $ 4,500 + $ 1.40 q
Utilities $ 5,300 + $ 0.60 q
Supplies $ 1,300 + $ 0.30 q
Equipment depreciation $ 18,500 + $ 3.00 q
Factory rent $ 8,200
Property taxes $ 2,500
Factory administration $ 13,200 + $ 0.70 q
The actual costs incurred in March in the Production Department are listed below:
Actual Cost Incurred in March
Direct labor $ 64,720
Indirect labor $ 9,280
Utilities $ 8,090
Supplies $ 2,710
Equipment depreciation $ 29,900
Factory rent $ 8,600
Property taxes $ 2,500
Factory administration $ 15,230
1.The company had budgeted for an activity level of 4,000 labor-hours in March. Complete the Production Department’s planning budget for the month.
2.The company actually worked 3,800 labor-hours in March. Complete the Production Department’s flexible budget for the month.
3. Calculate the spending variances for all expense items.
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
The company produced only 1,100 units, using 9,900 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
Six hundred and fifty hours of direct labor time were recorded at a total labor cost of $7,80
4.What is Direct Materials Price Variance?
1.The company had budgeted for an activity level of 4,000 labor-hours in March. Complete the Production Department’s planning budget for the month.
2.The company actually worked 3,800 labor-hours in March. Complete the Production Department’s flexible budget for the month.
3. Calculate the spending variances for all expense items.
Explanation / Answer
These are 2 full fedged individual and independent question. Answered first with 3 subparts.
Buget (4000 hours)
Buget (3800 hours)
Actual (3800 hours)
Spending variance
F/U
Particulars
Per hour
No of hours
Total
Per hour (1)
No of hours
Total
Per hour (2)
No of hours
Total
(1-2)*3800
Direct labour hour
16.60
4000
66400
16.60
3800
63080
17.03
3800
64720
-1640
U
Indirect labour hour
2.53
4000
10100
2.58
3800
9820
2.44
3800
9280
540
F
Fixed
4500
4500
Variable
1.40
4000
5600
1.40
3800
5320
Utilities
1.93
4000
7700
1.99
3800
7580
2.13
3800
8090
-510
U
Fixed
5300
5300
Variable
0.60
4000
2400
0.60
3800
2280
Supplies
0.63
4000
2500
0.64
3800
2440
0.71
3800
2710
-270
F
Fixed
1300
1300
Variable
0.30
4000
1200
0.30
3800
1140
Equipment depreciation
7.63
4000
30500
7.87
3800
29900
7.87
3800
29900
0
Fixed
18500
18500
Variable
3.00
4000
12000
3.00
3800
11400
Factory rent
2.05
4000
8200
2.16
3800
8200
2.26
3800
8600
-400
U
Property tax
0.63
4000
2500
0.66
3800
2500
0.66
3800
2500
0
Factory administration
4.00
4000
16000
4.17
3800
15860
4.01
3800
15230
630
F
Fixed
13200
13200
Variable
0.70
4000
2800
0.70
3800
2660
Total cost
210700
204980
Buget (4000 hours)
Buget (3800 hours)
Actual (3800 hours)
Spending variance
F/U
Particulars
Per hour
No of hours
Total
Per hour (1)
No of hours
Total
Per hour (2)
No of hours
Total
(1-2)*3800
Direct labour hour
16.60
4000
66400
16.60
3800
63080
17.03
3800
64720
-1640
U
Indirect labour hour
2.53
4000
10100
2.58
3800
9820
2.44
3800
9280
540
F
Fixed
4500
4500
Variable
1.40
4000
5600
1.40
3800
5320
Utilities
1.93
4000
7700
1.99
3800
7580
2.13
3800
8090
-510
U
Fixed
5300
5300
Variable
0.60
4000
2400
0.60
3800
2280
Supplies
0.63
4000
2500
0.64
3800
2440
0.71
3800
2710
-270
F
Fixed
1300
1300
Variable
0.30
4000
1200
0.30
3800
1140
Equipment depreciation
7.63
4000
30500
7.87
3800
29900
7.87
3800
29900
0
Fixed
18500
18500
Variable
3.00
4000
12000
3.00
3800
11400
Factory rent
2.05
4000
8200
2.16
3800
8200
2.26
3800
8600
-400
U
Property tax
0.63
4000
2500
0.66
3800
2500
0.66
3800
2500
0
Factory administration
4.00
4000
16000
4.17
3800
15860
4.01
3800
15230
630
F
Fixed
13200
13200
Variable
0.70
4000
2800
0.70
3800
2660
Total cost
210700
204980
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.