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 materials: 6 pounds at $8 per pound | $ | 48 |
Direct labor: 4 hours at $13 per hour | 52 | |
Variable overhead: 4 hours at $5 per hour | 20 | |
Total standard cost per unit | $ | 120 |
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: |
a. | Purchased 170,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. | ||||||||||
b. | Direct laborers worked 73,000 hours at a rate of $14 per hour. | ||||||||||
c. | Total variable manufacturing overhead for the month was $427,050.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started