Packaging Solutions Corporation manufactures and sells a wide variety of packagi

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 Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $16.20q $4,300$ 2.10q $ 5,100 0.60q $ 1,500+$ 0.20q $18,200+$ 2.50q $8,200 $2,500 $13,500+$ 0.60q The actual costs incurred in March in the Production Department are listed below: Actual Cost Incurred in March $64,740 $ 12,090 S 7.950 S 2.530 $27.950 S 8,600 S 2.500 s 15.190 Direct labor Indirect labor Utilities Supplies Fauiometd preciation 27 960 Factory rent Property taxes Factory administration

Explanation / Answer

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Direct labour (4100 * 16.2) 66420 Indirect labour (4300 + 4100 * 2.1) 12910 Utilities (5100 + 4100 *0.6) 7560 supplies (1500 + 4100 * 0.2) 2320 Equipment depreciation (18200 + 4100 * 2.5) 28450 factory rent 8200 property tax 2500 factory administration [13500 + 4100 * 0.6] 15960 Total expense $144320

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