Packaging Solutions Corporation manufactures and sells a wide variety of packagi

Question

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products Perfornance reports are prepared monthily for each department The pianning budget and fleable budger for the Production Department are based on the following formulas, where q is the number of labor-houns worked in a morth Direct labor Indirect labor Utlities 3 4,400+5 1.90q 5.300+5 040q s 1.700+3 0.30q $18.500+5 2.70 $8,100 $2,900 $13,800+5 050a Factory rent Property taoes The actual costs incurred in March in the Production Department are listed below Incurred in 68,040 3 11,580 S 7,370 S 3,170 5 20,300 S 8.500 5 2,000 $ 14,930 Indirect labor Ubities Supplies pment depreciation Factory rent Property tacs Factory administration Required: 1. The oompany had budgeted for an activity level of 4,200 labor-hours in March Complese the Produeton Department's planning budget for the month. Production Department Planning For the Month Ended March 31 Direct labor Indirect labor eities Supplies Factory rent Property taxes Factory administration Total expense 2 The company acualy worked 4.000 labo-hours in March Complena the Production Departmenrs fexible budget for the month Direct labor Indirect labor Utiides Supplies Equipment depredar on Factory rent Property txes Total expe

Explanation / Answer

1) labor hours 4,200 planning Budget fixed variable Direct labor 16.6 69720 indirect labor 4,400 1.9 12380 utilities 5,300 0.4 6980 supplies 1,700 0.3 2960 Equipment depreciation 18,500 2.7 29840 Factory rent 8,100 8,100 property taxes 2,900 2,900 factory administration 13,600 0.5 15700 total expense 54,500 22.4 148580 the highlighte figures are the answers planning budget = fixed component + 4200 hrs*variable component 2) labor hours 4,000 Flexible budget fixed variable Direct labor 16.6 66400 indirect labor 4,400 1.9 12000 utilities 5,300 0.4 6900 supplies 1,700 0.3 2900 Equipment depreciation 18,500 2.7 29300 Factory rent 8,100 8,100 property taxes 2,900 2,900 factory administration 13,600 0.5 15600 total expense 54,500 22.4 144100 3) Spending variance Actual flexible Spending variance Direct labor 68,040 66400 1,640 U indirect labor 11,560 12000 440 F utilities 7,370 6900 470 U supplies 3,170 2900 270 U Equipment depreciation 29,300 29300 0 N Factory rent 8,500 8,100 400 U property taxes 2,900 2,900 0 N factory administration 14,930 15600 670 F total expense 145,770 144100 1,670 U

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.