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 is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.109 $4,200 + $1.809 $5,100 + $0.309 $1,700 + $0.309 $18, 600 + $2.609 $8,300 $2,500 $13,500 + $0.600 The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 65,940 $ 10,940 $ 6,750 $ 3,170 $ 29,000 $ 8,700 $ 2,500 $ 15,250

Answer 1

Packaging Solutions Corp Planning Budget For the Year Ended Formula Budgeted Hours Expenese Direct Labor Indirect Labor 4200 67620 4200 16.10 1.80 11760 4200 4200 Utilities 0.30 5100 6360 4200 |Supplies Equipment Depreciation Factory rent Property Taxes Factory Administration Total Expenses 0.30 2960 4200 1700 2.60 18600 29520 4200 8300 8300 2500 2500 0.60 13500 16020 4200 145040

Packaging Solutions Corp Fexible Budget For the Year Ended Formula Actula Hours 4000 Expenese Direct Labor Indirect Labor 64400 4000 16.10 0 1.80 11400 4200 4000 Utilities 0.30 5100 6300 4000 Supplies Equipment Depreciation Factory rent Property Taxes Factory Administration Total Expenses 2900 0.30 4000 1700 2.60 18600 29000 4000 8300 8300 2500 2500 0.60 13500 15900 4000 140700

Packaging Solutions Corp Production Depratment Flexible Budget Performance For the Year Ended Actual Results Flexible Budget Activity Variance Planning Budget Spending Varaince Actula Hours 4000 4000 4200 Expenese Direct Labor 65940 1540 3220 64400 U 67620 360 Indirect Labor 10940 460 F 11400 U 11760 6300 6360 Utilities 6750 450 U 60 Supplies Equipment Depreciation 2900 3170 270 60 U 2960 29000 520 29520 29000 0 None Factory rent Property Taxes Factory Administration Total Expenses 8700 8300 400 0 None 8300 2500 2500 2500 0 None 0 None 15250 650 15900 F 120 U 16020 142250 1550 4340 145040 U 140700 U