Question
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 $13 per hour52.00Variable overhead: 4 hours at $5 per hour20.00Total standard variable cost per unit$ 120.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per MonthVariable Cost per Unit SoldAdvertising$ 380,000 Sales salaries and commissions$ 460,000$ 30.00Shipping expenses $ 21.00 The planning budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 25,500 units and incurred the following costs: Purchased 170,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.Direct-laborers worked 73,000 hours at a rate of $14.00 per hour.Total variable manufacturing overhead for the month was $427,050.Total advertising, sales salaries and commissions, and shipping expenses were $386,000, $545,000, and $295,000, respectively.12. What amounts of advertising, sales salaries and commissions, and shipping expenses would be included in the company's flexible budget for March?
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