The company actually worked 4,000 labor-hours. Packaging Sols Corporation manufa

Question

The company actually worked 4,000 labor-hours.

Packaging Sols 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 $ 4,200$ 2.00q $5,700$ 0.50q $ 1,300S 0.20q $18,500S 2.40q $8,100 $2,700 $13,600 0.80q The actual costs incurred in March in the Production Department are listed below Actual Cost Incurred in Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration March $ 66,360 $ 11,780 $ 8,190 $ 2,350 $28,100 $8,500 $ 2,700 $16,190

Explanation / Answer

Actual Flexible budget Spending variances Direct labor 66360 64800 1560 U Indirect labor 11780 12200 420 F Utilities 8190 7700 490 U Supplies 2350 2100 250 U Equipment depreciation 28100 28100 0 None Factory rent 8500 8100 400 U Property taxes 2700 2700 0 None Factory administration 16190 16800 610 F Total expenses 144170 142500 1670 U

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