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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 $10.00 per pound Direct labor: 2 hours at $14.00 per hour Variable overhead: 2 hours at $6.00 per hour 40.00 28.00 12.00 Total standard variable cost per unit 80.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month $270,000 $100,000 Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $12.00 $3.00 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in b. Direct-laborers worked 62,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $390,600. d. Total advertising, sales salaries and commissions, and shipping expenses were $279,000, $390,600, and $122,000, respectively value: 0.83 points Required 1. What raw materials cost would be included in the company's flexible budget for March? material cost
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