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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