EXERCISE 9-1

EXERCISE 9-14 Flexible Budget Performance Report in a Cost Center LO9-1, LO9-2, LO9-3, LO9-4 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: Cost Formulas Direct labor .. Indirect labor Utilities... $15.80q $8,200+ $1.60q $6,400 + $0.80q Supplies ... $1,100 + $0.40q Equipment depreciation $23,000+ $3.70q Factory rent ... $8,400 $2,100 $11,700+ $1.90q Property taxes Factory administration The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 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 $134.730 $19,860 $14,570 $4,980 $54,080 $8,700 $2,100 $26,470