[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:

Direct material: 5 pounds at $8.00 per pound	$	40.00
Direct labor: 2 hours at $14 per hour		28.00
Variable overhead: 2 hours at $5 per hour		10.00
Total standard variable cost per unit	$	78.00

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

	Fixed Cost per Month			Variable Cost per Unit Sold
Advertising	$	200,000
Sales salaries and commissions	$	100,000		$	12.00
Shipping expenses				$	3.00

The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs:

a.	Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production.
b.	Direct-laborers worked 55,000 hours at a rate of $15.00 per hour.
c.	Total variable manufacturing overhead for the month was $280,500.
d.	Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively.

1.

value: 5.00 points

Required information

Required:

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

References

eBook & Resources

WorksheetLearning Objective: 08-02 Prepare a report showing revenue and spending variances.Learning Objective: 08-06 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 08-04 Compute the direct materials price and quantity variances and explain their significance.

Learning Objective: 08-01 Prepare a flexible budget.Learning Objective: 08-05 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

2.

value: 5.00 points

Required information

2.	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 variance.).)

References

eBook & Resources

WorksheetLearning Objective: 08-02 Prepare a report showing revenue and spending variances.Learning Objective: 08-06 Compute the variable manufacturing overhead rate and efficiency variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 08-04 Compute the direct materials price and quantity variances and explain their significance.

Learning Objective: 08-01 Prepare a flexible budget.Learning Objective: 08-05 Compute the direct labor rate and efficiency variances and explain their significance.

Check my work

3.

value: 5.00 points

Required information

3.	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 variance.).)