Preble Company manufactures one product. Its variablemanufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:Direct material: 5 pounds at $9.00 per pound $ 45.00 Direct labor:3 hours at $14.00 per hour 42.00 Variable overhead: 3 hours at$6.00 per hour 18.00 Total standard variable cost per unit $ 105.00The company also established the following cost formulas for itsselling expenses: Fixed Cost per Month Variable Cost per Unit SoldAdvertising $ 340,000 Sales salaries and commissions $ 240,000 $12.00 Shipping expenses $ 3.00 The planning budget for March wasbased on producing and selling 28,000 units. However, during Marchthe company actually produced and sold 34,000 units and incurredthe following costs:
a. Purchased 180,000 pounds of raw materials at a cost of $8.50per pound. All of this material was used in production.
b. Direct-laborers worked 90,000 hours at a rate of $15.00 perhour.
c. Total variable manufacturing overhead for the month was$565,110.
d. Total advertising, sales salaries and commissions, andshipping expenses were $352,000, $565,200, and $129,000,respectively.
9. What variable manufacturing overhead cost would be includedin the companyâs flexible budget for March?
10. What is the variable overhead efficiency variance for March?(Input the amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
11. What is the variable overhead rate variance for March? (Donot round intermediate calculations. Input the amount as a positivevalue. Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance.).)
12. What amounts of advertising, sales salaries and commissions,and shipping expenses would be included in the companyâs flexiblebudget for March?
13. What is the spending variance related to advertising? (Inputthe amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
14. What is the spending variance related to sales salaries andcommissions? (Input the amounts as positive values. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance.).)
15. What is the spending variance related to shipping expenses?(Input the amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
Preble Company manufactures one product. Its variablemanufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:Direct material: 5 pounds at $9.00 per pound $ 45.00 Direct labor:3 hours at $14.00 per hour 42.00 Variable overhead: 3 hours at$6.00 per hour 18.00 Total standard variable cost per unit $ 105.00The company also established the following cost formulas for itsselling expenses: Fixed Cost per Month Variable Cost per Unit SoldAdvertising $ 340,000 Sales salaries and commissions $ 240,000 $12.00 Shipping expenses $ 3.00 The planning budget for March wasbased on producing and selling 28,000 units. However, during Marchthe company actually produced and sold 34,000 units and incurredthe following costs:
a. Purchased 180,000 pounds of raw materials at a cost of $8.50per pound. All of this material was used in production.
b. Direct-laborers worked 90,000 hours at a rate of $15.00 perhour.
c. Total variable manufacturing overhead for the month was$565,110.
d. Total advertising, sales salaries and commissions, andshipping expenses were $352,000, $565,200, and $129,000,respectively.
9. What variable manufacturing overhead cost would be includedin the companyâs flexible budget for March?
10. What is the variable overhead efficiency variance for March?(Input the amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
11. What is the variable overhead rate variance for March? (Donot round intermediate calculations. Input the amount as a positivevalue. Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance.).)
12. What amounts of advertising, sales salaries and commissions,and shipping expenses would be included in the companyâs flexiblebudget for March?
13. What is the spending variance related to advertising? (Inputthe amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
14. What is the spending variance related to sales salaries andcommissions? (Input the amounts as positive values. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance.).)
15. What is the spending variance related to shipping expenses?(Input the amount as a positive value. Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance.).)
Related questions
Preble Company manufactures one product. Its variablemanufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows: |
Direct material: 5 pounds at $9.00 per pound | $ | 45.00 |
Direct labor: 3 hours at $18.00 per hour | 54.00 | |
Variable overhead: 3 hours at $9.00 per hour | 27.00 | |
Total standard variable cost per unit | $ | 126.00 |
The company also established the following cost formulas for itsselling expenses: |
Fixed Cost per Month | Variable Cost | |||||
Advertising | $ | 300,000 | ||||
Sales salaries and commissions | $ | 220,000 | $ | 16.00 | ||
Shipping expenses | $ | 4.00 | ||||
The planning budget for March was based on producing and selling20,000 units. However, during March the company actually producedand sold 24,800 units and incurred the following costs: |
a. | Purchased 155,000 pounds of raw materials at a cost of $7.20 perpound. All of this material was used in production. |
b. | Direct-laborers worked 68,000 hours at a rate of $19.00 perhour. |
c. | Total variable manufacturing overhead for the month was$615,000. |
d. | Total advertising, sales salaries and commissions, and shippingexpenses were $308,000, $614,720, and $106,000, respectively. |
Questions:
What is the variable overhead rate variance for March?
| What amounts of advertising, sales salaries and commissions, andshipping expenses would be included in the companyâs flexiblebudget for March?
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What is the spending variance related to advertising?
What is the spending variance related to sales salaries andcommissions?
What is the spending variance related to shipping expenses?
Preble Company manufactures one product. Its variablemanufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:
| Direct material: 5 pounds at $10.00 per pound | $ | 50.00 |
| Direct labor: 3 hours at $17.00 per hour | 51.00 | |
| Variable overhead: 3 hours at $6.00 per hour | 18.00 | |
| Total standard variable cost per unit | $ | 119.00 |
The company also established the following cost formulas for itsselling expenses: |
| Fixed Cost per Month | Variable Cost per Unit Sold | |||||
| Advertising | $ | 330,000 | ||||
| Sales salaries and commissions | $ | 130,000 | $ | 15.00 | ||
| Shipping expenses | $ | 4.00 | ||||
The planning budget for March was based on producing and selling24,000 units. However, during March the company actually producedand sold 30,600 units and incurred the following costs: |
| a. | Purchased 170,000 pounds of raw materials at a cost of $9.00 perpound. All of this material was used in production. | ||
| b. | Direct-laborersworked 82,000 hours at a rate of $18.00 per hour. | ||
| c. | Total variablemanufacturing overhead for the month was $505,000. | ||
| d. | Total advertising, sales salaries and commissions, and shippingexpenses were $337,000, $505,120, and $128,000, respectively. 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" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance.).)
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