Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 materiall 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead 2 hours at $5 per hour Total standard variable cost per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Pixed Cost per Month $ 200,000 $ 100,000 Advertising Sales salaries and commissions Shipping expenses $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively, Foundational 9-1 Required: 1. What raw materials cost would be included in the company's flexible budget for March? 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. 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cont per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Pixed cost per Month $ 200,000 $ 100,000 Advertising Sales salaries and commissions Shipping expenses $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. a. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively. Foundational 9-2 2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "P" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) 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: 5 poundo at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead 2 hours at $5 per hour Total standard variable cont per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Fixed Cost per Month $ 200,000 $ 100,000 Advertising Sales salaries and commissions Shipping expenses $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: 0. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. d. Total advertising, sales salaries and commissions, and shipping expenses were $ 210,000, $455,000, and $115,000, respectively. Foundational 9-3 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 (.e., zero variance.). Input the amount as a positive value.) 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. 5 pounds at $8.00 per pound Direct labore 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Pixed cost per Month $ 200,000 $ 100,000 Advertising Sales salaries and commissions Shipping expenses $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500, d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,00 respectively. Foundational 9-4 4. If Preble had purchased 170,000 pounds of materials at $7.50 per pound and used 160,000 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 (.e., zero variance.). Input the amount as a positive value.) 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: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead 2 hours at $5 per hour Total standard variable cost per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Fixed cost Cost per per Month Unit Sold Advertising $ 200,000 Sales salaries and commissions $ 100,000 $12.00 Shipping expenses $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively. Foundational 9-5 5. If Preble had purchased 170,000 pounds of materials at $7.50 per pound and used 160,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "P" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance.). Input the amount as a positive value.) 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: 5 pounds at $8.00 per pound Direct labori 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its seling expenses: Variable Cost per Unit Sold Fixed Cost per Month $ 200,000 $ 100,000 Advertising Sales salaries and commissions Shipping expenses $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively. Foundational 9-6 6. What direct labor cost would be included in the company's flexible budget for March? laher not 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 materiali 5 pounds at $8.00 per pound Direct labor 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit $40.00 28.00 10.00 $78.00 The company also established the following cost formulas for its selling expenses: Variable Coat per Unit Sold Advertising Sales salaries and commissions Shipping expenses Fixed Coat per Month $ 200,000 $ 100,000 $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during Morch the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. . Total variable manufacturing overhead for the month was $280,500, , Total advertising, sales salaries and commissions, and shipping expenses were $ 210,000, $455,000, and $115,000, respectively. Foundational 9-7 7. What is the direct labor efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance.), Input the amount as a positive value.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advances In Quantitative Analysis Of Finance And Accounting (Vol. 5)

Authors: Lee Cheng Few

1st Edition

9812706283, 9789812706287

More Books

Students also viewed these Accounting questions

Question

Are you going to have to tread carefully? Listen more than talk?

Answered: 1 week ago