2 Exercise 9-16 Flexible Budgets in a Cost Center (LO9-1, LO9-2] 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: 3.33 points eBook Print Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.409 $4,800 + $2.009 $5,500 + $0.609 $1,400 + $0.30q $18,200 + $2.500 $8,200 $3,000 $13,400 + $0.709 References 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 $ 67,200 $ 12,380 $ 8, 410 $ 2,870 $ 28,200 $ 8,600 $ 3,000 $ 15,570 2 Complete this question by entering your answers in the tabs below. 3.33 points Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. eBook Print Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 References Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ 0 2 Complete this question by entering your answers in the tabs below. 3.33 points Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget for the month. eBook Print Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 References Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense $ 0 2 Required 1 Required 2 Required 3 3.33 points Calculate the spending variances for all expense items. (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.) eBook Print Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Results Spending Variances 4,000 References Flexible Budget Labor-hours Direct labor $ 67,200 Indirect labor 12,380 Utilities 8,410 2,870 28,200 Supplies Equipment depreciation Factory rent Property taxes Factory administration 8,600 3,000 15,570 Total expense $ 146,230