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: 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 $ 108.00The company also established the following cost formulas for itsselling expenses: Fixed Cost per Month Variable Cost per Unit SoldAdvertising $ 230,000 Sales salaries and commissions $ 270,000 $14.00 Shipping expenses $ 4.00 The planning budget for March wasbased on producing and selling 28,000 units. However, during Marchthe company actually produced and sold 33,000 units and incurredthe following costs: a. Purchased 165,000 pounds of raw materialsat a cost of $7.20 per pound. All of this material was used inproduction. b. Direct-laborers worked 87,000 hours at a rate of$17.00 per hour. c. Total variable manufacturing overhead for themonth was $729,060. d. Total advertising, sales salaries andcommissions, and shipping expenses were $233,000, $729,060, and$144,000, respectively.
9.What variable manufacturing overhead cost would be included inthe companyâs flexible budget for March?
11.What is the variable overhead efficiency variance forMarch?
10. What is the variable overhead rate variance for March?
13.What is the spending variance related to advertising?
14.What is the spending variance related to sales salaries andcommissions?
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: 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 $ 108.00The company also established the following cost formulas for itsselling expenses: Fixed Cost per Month Variable Cost per Unit SoldAdvertising $ 230,000 Sales salaries and commissions $ 270,000 $14.00 Shipping expenses $ 4.00 The planning budget for March wasbased on producing and selling 28,000 units. However, during Marchthe company actually produced and sold 33,000 units and incurredthe following costs: a. Purchased 165,000 pounds of raw materialsat a cost of $7.20 per pound. All of this material was used inproduction. b. Direct-laborers worked 87,000 hours at a rate of$17.00 per hour. c. Total variable manufacturing overhead for themonth was $729,060. d. Total advertising, sales salaries andcommissions, and shipping expenses were $233,000, $729,060, and$144,000, respectively.
9.What variable manufacturing overhead cost would be included inthe companyâs flexible budget for March?
11.What is the variable overhead efficiency variance forMarch?
10. What is the variable overhead rate variance for March?
13.What is the spending variance related to advertising?
14.What is the spending variance related to sales salaries andcommissions?
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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_______
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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?
