Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared...
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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 Cost Formulas $16.40q $4,400+ $1.70q $5,700+ $0.708q $1,800+ $0.30q $18,600 $3.00g $8,300 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $2,700 $13,600 + 50.500 The Production Department planned to work 4,000 labor-hours in March; however, it actually worked 3,800 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 63,920 $ 10,380 $8,890 $ 3,210 $ 30,000 $8,700 $ 2,700 $ 14,830 Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. 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 Cost Formulas $16.40q $4,400+ $1.70q $5,700+ $0.708q $1,800+ $0.30q $18,600 $3.00g $8,300 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $2,700 $13,600 + 50.500 The Production Department planned to work 4,000 labor-hours in March; however, it actually worked 3,800 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 63,920 $ 10,380 $8,890 $ 3,210 $ 30,000 $8,700 $ 2,700 $ 14,830 Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items.
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Answer 1 Production Departments Planning Budget for the Month The Production Departments planning budget for the month of March is shown in the table ... View the full answer
Related Book For
Managing Business Process Flows Principles of Operations Management
ISBN: 978-0136036371
3rd edition
Authors: Ravi Anupindi, Sunil Chopra, Sudhakar Deshmukh, Jan Van Mieg
Posted Date:
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