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:

The actual costs incurred in March in the Production Department are listed below:

Direct labor ndirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $16.30q $ 4,600 $ 2.00q $ 5,200 +$0.50q $1,500 $0.20q $18,200 +$ 2.90q $8,500 $2,500 $13,700 +$0.60q

Explanation / Answer

1).

2).

3).  

Particulars Fixed Cost Variable Cost (Budgeted Hours * Standerd Rate) Total Cost Direct Labor $66830 $66830 Indirect Labor $4600 $8200 $12800 Utilities $5200 $2050 $7250 Supplies $1500 $820 $2320 Equipment Depreciation $18200 $11890 $30090 Factory Rent $8500 $8500 Property Taxes $2500 $2500 Factory Administration $13700 $2460 $16160 Total Expense $54200 $92250 $146450

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