Packaging Solutions Corporation manufactures and sells a wide variety of packagi
ID: 2483940 • 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 4,400 labor-hours in March. Complete the Production Department’s planning budget for the month.
The company actually worked 4,200 labor-hours in March. Complete the Production Department’s flexible budget for the month.
Complete 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 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:
Explanation / Answer
Answer 1
Planning buget - 4400 labour hours
Particulars
Fixed
Per hour
No of hour
Variable
Total
Direct labour
0
16.2
4400
71280
71280
indirect labour
4100
1.5
4400
6600
10700
Utilities
5500
0.7
4400
3080
8580
Supplies
1200
0.2
4400
880
2080
Equipment depreciation
18600
2.5
4400
11000
29600
Factory rent
8400
0
0
0
8400
property tax
2500
0
0
0
2500
Factory administreation
13300
0.5
4400
2200
15500
Total
148640
Answer 2
Planning buget - 4200 labour hours
Particulars
Fixed
Per hour
No of hour
Variable
Total
Direct labour
0
16.2
4200
68040
68040
indirect labour
4100
1.5
4200
6300
10400
Utilities
5500
0.7
4200
2940
8440
Supplies
1200
0.2
4200
840
2040
Equipment depreciation
18600
2.5
4200
10500
29100
Factory rent
8400
0
4200
0
8400
property tax
2500
0
4200
0
2500
Factory administreation
13300
0.5
4200
2100
15400
Total
144320
Answer 3
Planning buget - 4200 labour hours
Actual - 4200 labour hours
Flexi buget Variance
U/F
Particulars
Fixed
Per hour
No of hour
Variable
Total
Total
Direct labour
0
16.2
4200
68040
68040
69600
-1560
U
indirect labour
4100
1.5
4200
6300
10400
9880
520
F
Utilities
5500
0.7
4200
2940
8440
8970
-530
U
Supplies
1200
0.2
4200
840
2040
2290
-250
U
Equipment depreciation
18600
2.5
4200
10500
29100
29100
0
Factory rent
8400
0
4200
0
8400
8800
-400
U
property tax
2500
0
4200
0
2500
2500
0
Factory administreation
13300
0.5
4200
2100
15400
14730
670
F
Total
144320
145870
-1550
U
Answer 1
Planning buget - 4400 labour hours
Particulars
Fixed
Per hour
No of hour
Variable
Total
Direct labour
0
16.2
4400
71280
71280
indirect labour
4100
1.5
4400
6600
10700
Utilities
5500
0.7
4400
3080
8580
Supplies
1200
0.2
4400
880
2080
Equipment depreciation
18600
2.5
4400
11000
29600
Factory rent
8400
0
0
0
8400
property tax
2500
0
0
0
2500
Factory administreation
13300
0.5
4400
2200
15500
Total
148640
Answer 2
Planning buget - 4200 labour hours
Particulars
Fixed
Per hour
No of hour
Variable
Total
Direct labour
0
16.2
4200
68040
68040
indirect labour
4100
1.5
4200
6300
10400
Utilities
5500
0.7
4200
2940
8440
Supplies
1200
0.2
4200
840
2040
Equipment depreciation
18600
2.5
4200
10500
29100
Factory rent
8400
0
4200
0
8400
property tax
2500
0
4200
0
2500
Factory administreation
13300
0.5
4200
2100
15400
Total
144320
Answer 3
Planning buget - 4200 labour hours
Actual - 4200 labour hours
Flexi buget Variance
U/F
Particulars
Fixed
Per hour
No of hour
Variable
Total
Total
Direct labour
0
16.2
4200
68040
68040
69600
-1560
U
indirect labour
4100
1.5
4200
6300
10400
9880
520
F
Utilities
5500
0.7
4200
2940
8440
8970
-530
U
Supplies
1200
0.2
4200
840
2040
2290
-250
U
Equipment depreciation
18600
2.5
4200
10500
29100
29100
0
Factory rent
8400
0
4200
0
8400
8800
-400
U
property tax
2500
0
4200
0
2500
2500
0
Factory administreation
13300
0.5
4200
2100
15400
14730
670
F
Total
144320
145870
-1550
U
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