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    Managerial Accounting for Packaging Solutions Corporation

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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:

    Cost Formulas
    Direct labor $14.80q
    Indirect labor $7,300 + $1.40q
    Utilities $8,200 + $0.70q
    Supplies $1,000 + $0.20q
    Equipment depreciation $22,500 + $3.10q
    Factory rent $6,600
    Property taxes $1,540
    Factory administration $11,650 + $1.70q

    The actual costs incurred in March in the Production Department are listed below:

    Actual Cost
    Incurred in March
    Direct labor $123,730
    Indirect labor $19,060
    Utilities $16,370
    Supplies $3,070
    Equipment depreciation $51,330
    Factory rent $8,100
    Property taxes $1,540
    Factory administration $20,570

    Requirement 1:
    The company had budgeted for an activity level of 10,000 labor-hours in March. Prepare the Production Department's planning budget for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)
    Packaging Solutions Corporation
    Production Department Planning Budget
    For the Month Ended March 31

    Requirement 2:
    The company actually worked 9,300 labor-hours in March. Prepare the Production Department's flexible budget for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)
    Packaging Solutions Corporation
    Production Department Flexible Budget.

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    https://brainmass.com/business/management-accounting/managerial-accounting-packaging-solutions-corporation-382187

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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:

    Cost Formulas
    Direct labor 14.8
    Indirect labor 7,300 1.4
    Utilities 8,200 0.7
    Supplies 1,000 0.2
    Equipment depreciation 22,500 3.1
    Factory rent 6,600
    Property taxes 1,540
    Factory administration 11,650 ...

    Solution Summary

    This solution helps answer various managerial accounting for packaging solutions corporation.

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