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	$	40.00
Direct labor: 2 hours at $15.00 per hour		30.00
Variable overhead: 2 hours at $9.00 per hour		18.00
Total standard variable cost per unit	$	88.00

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

	Fixed Cost per Month			Variable Cost per Unit Sold
Advertising	$	240,000
Sales salaries and commissions	$	130,000		$	13.00
Shipping expenses				$	3.00

The planning budget for March was based on producing and selling 29,000 units. However, during March the company

actually produced and sold 34,000 units and incurred the following costs:

a.	Purchased 160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.
b.	Direct-laborers worked 58,000 hours at a rate of $16.00 per hour.
c.	Total variable manufacturing overhead for the month was $564,040.
d.	Total advertising, sales salaries and commissions, and shipping expenses were $246,000, $563,760, and $119,000, respectively.

Questions:

What raw materials cost would be included in the companys flexible budget for March?

Raw material cost=

What is the materials quantity variance for March? (Input the amount as a positive value. Indicate the effect

of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero

Materials quantity variance=

Favorable or Unfavorable?

What is the materials price variance for March? (Input the amount as a positive value. Indicate the effect of

each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero

Materials price variance=

Favorable or Unfavorable?

If Preble had purchased 174,000 pounds of materials at $8 per pound and used 160,000 pounds in production,

what would be the materials quantity variance for March? (Input the amount as a positive value. Indicate the

effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,

zero variance.).)

Materials quantity variance=

Favorable or Unfavorable?

If Preble had purchased 174,000 pounds of materials at $8.50 per pound and used 160,000 pounds in

production, what would be the materials price variance for March? (Input the amount as a positive value.

Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no

effect (i.e., zero variance.).)

Materials price variance=

Favorable or Unfavorable?

What direct labor cost would be included in the companys flexible budget for March?

Direct labor cost=

What is the direct labor efficiency variance for March? (Input the amount as a positive value. Indicate the

effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,

zero variance.).)

Labor efficiency variance=

Favorable or Unfavorable?

What is the direct labor rate variance for March? (Input the amount as a positive value. Indicate the effect of

each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero

Labor rate variance=

Favorable or Unfavorable?

What variable manufacturing overhead cost would be included in the companys flexible budget for March?

Variable manufacturing overhead cost=

What is the variable overhead efficiency variance for March? (Input the amount as a positive value. Indicate

the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect

(i.e., zero variance.).)

Variable overhead efficiency variance=

Favorable or Unfavorable?

What is the variable overhead rate variance for March? (Do not round intermediate calculations. Input the

amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for

unfavorable, and "None" for no effect (i.e., zero variance.).)

Variable overhead rate variance=

Favorable or Unfavorable?

What amounts of advertising, sales salaries and commissions, and shipping expenses would be included in

the companys flexible budget for March?

Preble Company

Flexible Budget

For the Month Ended March 31

Units sold (q) 34,000

Expenses:

Advertising

Sales salaries and commissions

Shipping expenses

Total

What is the spending variance related to advertising? (Input the amount as a positive value. Indicate the

effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,

zero variance.).)

Spending variance=

Favorable or Unfavorable?

What is the spending variance related to sales salaries and commissions? (Input the amounts as positive

values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and

"None" for no effect (i.e., zero variance.).)

Spending variance=

Favorable or Unfavorable?

What is the spending variance related to shipping expenses? (Input the amount as a positive value.

Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None"

for no effect (i.e., zero variance.).)

Spending variance=

Favorable or Unfavorable?