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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 unit is
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 material: 4 pounds at $9.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $6 per hour Total standard variable cost per unit $36.00 45.00 18.00 $99.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Fixed Cost per Month $ 210,000 $ 120,000 Advertising Sales salaries and commissions Shipping expenses $13.00 $ 4.00 The planning budget for March was based on producing and selling 26,000 units. However, during March the company actually produced and sold 31,000 units and incurred the following costs: a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. b. Direct-laborers worked 56,000 hours at a rate of $16.00 per hour. C. Total variable manufacturing overhead for the month was $524,720. d. Total advertising, sales salaries and commissions, and shipping expenses were $220,000, $460,000, and $125,000, respectively. Required: 1. What raw materials cost would be included in the company's flexible budget for March? Raw material cost
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