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 $16.20q
Indirect labor $4,300 $1.70q
Utilities $5,600 $0.70q
Supplies $1,400 $0.20q
Equipment depreciation $18,400 $2.90q
Factory rent $8,200
Property taxes $2,700
Factory administration $13,200 $0.80q
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.
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