Chapter 10 Homework

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Foundational [LO10-1, LO10-2, LO10-3]

[The following information applies to the questions displayed below.]

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

Direct materials: 8 pounds at $10 per pound	$	80
Direct labor: 5 hours at $13 per hour		65
Variable overhead: 5 hours at $8 per hour		40
Total standard cost per unit	$	185

The planning budget for March was based on producing and selling 15,000 units. However, during March the company actually produced and sold 17,000 units and incurred the following costs:

a.	Purchased 170,000 pounds of raw materials at a cost of $8.00 per pound. All of this material was used in production.
b.	Direct laborers worked 64,000 hours at a rate of $14 per hour.
c.	Total variable manufacturing overhead for the month was $513,920.

Foundational 10-1

1.	What raw materials cost would be included in the companys planning budget for March?

Foundational 10-2

2.	What raw materials cost would be included in the companys flexible budget for March?

Foundational 10-3

3.	What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

Foundational 10-4

4.	What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

Foundational 10-5

5.

If Preble had purchased 179,000 pounds of materials at $8.00 per pound and used 170,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)

Foundational 10-6

6.

If Preble had purchased 179,000 pounds of materials at $8.00 per pound and used 170,000 pounds in production, what would be the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)

Foundational 10-7

7.	What direct labor cost would be included in the companys planning budget for March?

Foundational 10-8

8.	What direct labor cost would be included in the companys flexible budget for March?

Foundational 10-9

9.	What is the labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)

Foundational 10-10

10.	What is the labor efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)

Foundational 10-11

11.	What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.)

Foundational 10-12

12.	What variable manufacturing overhead cost would be included in the companys planning budget for March?

Foundational 10-13

13.	What variable manufacturing overhead cost would be included in the companys flexible budget for March?

Foundational 10-14

14.	What is the variable overhead rate variance for March? (Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

Foundational 10-15

15.	What is the variable overhead efficiency variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)