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: 5 pounds at $8 per pound	$	40
Direct labor: 4 hours at $15 per hour		60
Variable overhead: 4 hours at $5 per hour		20
Total standard cost per unit	$	120

The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs:

a.	Purchased 150,000 pounds of raw materials at a cost of $6.40 per pound. All of this material was used in production.
b.	Direct laborers worked 66,000 hours at a rate of $18 per hour.
c.	Total variable manufacturing overhead for the month was $413,820.

rev: 10_13_2014_QC_56635

6.

If Preble had purchased 181,000 pounds of materials at $6.40 per pound and used 150,000 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.)

References

eBook & Resources

WorksheetLearning Objective: 10-01 Compute the direct materials price and quantity variances and explain their significance.Learning Objective: 10-03 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 10-02 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

7.

value: 0.66 points

Required information

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

References

eBook & Resources

WorksheetLearning Objective: 10-01 Compute the direct materials price and quantity variances and explain their significance.Learning Objective: 10-03 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 10-02 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

8.

value: 0.66 points

Required information

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

References

eBook & Resources

WorksheetLearning Objective: 10-01 Compute the direct materials price and quantity variances and explain their significance.Learning Objective: 10-03 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 10-02 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

9.

value: 0.66 points

Required information

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.)

References

eBook & Resources

WorksheetLearning Objective: 10-01 Compute the direct materials price and quantity variances and explain their significance.Learning Objective: 10-03 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 10-02 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

10.

value: 0.66 points

Required information

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.)

References

eBook & Resources

Worksheet