Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based

Required information [The following information applies to the questions displayed below.]

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:

image text in transcribedThe company also established the following cost formulas for its selling expenses:

image text in transcribedThe planning budget for March was based on producing and selling 19,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs:

a. Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.

b. Direct-laborers worked 60,000 hours at a rate of $15.00 per hour.

c. Total variable manufacturing overhead for the month was $336,600.

d. Total advertising, sales salaries and commissions, and shipping expenses were $260,000, $480,000, and $165,000, respectively.

If you could write the steps for the following questions, I would really appreciate that.

6. What direct labor cost would be included in the company's flexible budget for March?

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 (i.e., zero variance.). Input the amount as a positive value.)

8. What is the direct labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

9. What variable manufacturing overhead cost would be included in the company's flexible budget for March?

10. What is the variable overhead efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

Direct material: 6 pounds at $8.00 per pound $48.00 Direct labor: 3 hours at $14 per hour 42.00 Variable overhead: 3 hours at $5 per hour Total standard variable cost per unit 15.00$105.00 \begin{tabular}{lcc|} & & Variable \\ & FixedCostperMonth & CostperUnitSold \\ Advertising & $250,000 & \\ Sales salaries and commissions & $200,000 & $17.00 \\ Shipping expenses & & $8.00 \\ \hline \end{tabular}

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

Step: 3

blur-text-image

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

More Books

Students also viewed these Accounting questions