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 $9.00 per pound
$ 36.00
Direct labor: 3 hours at $12 per hour
36.00
Variable overhead: 3 hours at $8 per hour
24.00
Total standard variable cost per unit
$ 96.00
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month
Variable Cost per Unit Sold
Advertising
$ 230,000
Sales salaries and commissions
$ 160,000
$ 15.00
Shipping expenses
$ 6.00
The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs:
- Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
-
Direct-laborers worked 58,000 hours at a rate of $13.00 per hour.
-
Total variable manufacturing overhead for the month was $729,060.
-
Total advertising, sales salaries and commissions, and shipping expenses were $240,000, $470,000, and $145,000, respectively.
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.)
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 $9.00 per pound $ 36.00 Direct labor: 3 hours at $12 per hour 36.00 Variable overhead: 3 hours at $8 per hour 24.00 Total standard variable cost per unit $ 96.00
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 230,000 Sales salaries and commissions $ 160,000 $ 15.00 Shipping expenses $ 6.00
The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs:
- Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
-
Direct-laborers worked 58,000 hours at a rate of $13.00 per hour.
-
Total variable manufacturing overhead for the month was $729,060.
-
Total advertising, sales salaries and commissions, and shipping expenses were $240,000, $470,000, and $145,000, respectively.
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.)
Related questions
| 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 $9.00 per pound | $ | 36.00 |
| Direct labor: 3 hours at $16.00 per hour | 48.00 | |
| Variable overhead: 3 hours at $8.00 per hour | 24.00 | |
| Total standard variable cost per unit | $ | 108.00 |
| The company also established the following cost formulas for its selling expenses: |
| Fixed Cost per Month | Variable Cost per Unit Sold | |||||
| Advertising | $ | 230,000 | ||||
| Sales salaries and commissions | $ | 270,000 | $ | 14.00 | ||
| Shipping expenses | $ | 4.00 | ||||
| The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs: |
| a. | Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. | |||
| b. | Direct-laborers worked 87,000 hours at a rate of $17.00 per hour. | |||
| c. | Total variable manufacturing overhead for the month was $729,060. | |||
| d. | Total advertising, sales salaries and commissions, and shipping expenses were $233,000, $729,060, and $144,000, respectively. 1. What raw materials cost would be included in the companyâs flexible budget for March? Raw Material Cost_______
|
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: |
| Directmaterials: 5 pounds at $8.00 per pound | $ | 40.00 |
| Direct labor: 2hours at $14 per hour | 28.00 | |
| Variable overhead: 2hours at $5 per hour | 10.00 | |
| Total standard costper unit | $ | 78.00 |
The planning budget for March was based on producing and selling25,000 units. However, during March the company actually producedand sold 30,000 units and incurred the following costs: |
| a. | Purchased 160,000 pounds of raw materials at a cost of $7.50 perpound. All of this material was used in production. | ||
| b. | Direct laborers worked 55,000 hours at a rate of $15.00 perhour. | ||
| c. | Total variable manufacturing overhead for the month was$280,500. Required:
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