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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: 6 pounds at $8.00 per pound$48.00Direct labor: 4 hours at $17 per hour68.00Variable overhead: 4 hours at $4 per hour16.00Total standard variable cost per unit$132.00

The company also established the following cost formulas for its selling expenses:

Fixed Cost per MonthVariable Cost per Unit SoldAdvertising$370,000Sales salaries and commissions$440,000$29.00Shipping expenses$20.00

The planning budget for March was based on producing and selling 19,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs:

  1. Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
  2. Direct-laborers worked 72,000 hours at a rate of $18.00 per hour.
  3. Total variable manufacturing overhead for the month was $336,960.
  4. Total advertising, sales salaries and commissions, and shipping expenses were $374,000, $540,000, and $285,000, respectively.

rev: 11_16_2018_QC_CS-146879

Required:

1. What raw materials cost would be included in the company's flexible budget for March?

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