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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor - hours and its standard cost card per
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct laborhours and its standard cost card per unit is as follows:
Direct material: pounds at $ per pound $
Direct labor: hours at $ per hour
Variable overhead: hours at $ per hour
Total standard variable cost per unit $
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month Variable Cost per Unit Sold
Advertising $
Sales salaries and commissions $ $
Shipping expenses $
The planning budget for March was based on producing and selling units. However, during March the company actually produced and sold units and incurred the following costs:
Purchased pounds of raw materials at a cost of $ per pound. All of this material was used in production.
Directlaborers worked hours at a rate of $ per hour.
Total variable manufacturing overhead for the month was $
Total advertising, sales salaries and commissions, and shipping expenses were $ $ and $ respectively.
If Preble had purchased pounds of materials at $ per pound and used pounds in production, what would be the materials price variance for March?
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