Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:$ 55.00Direct material: 5 pounds at $11.00 per poundDirect labor: 3 hours at $12 per hourVariable overhead: 3 hours at $7 per hour36.0021.00Total standard variable cost per unit$112.00The company also established the following cost formulas for its selling expenses:Fixed CostVariable Costper Month$ 280,000$ 260,000per Unit SoldAdvertisingSales salaries and commissionsShipping expenses$ 20.00$ 11.00The planning budget for March was based on producing and selling 21,000 units. However, during March the companyactually produced and sold 26,600 units and incurred the following costs:a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production.b. Direct-laborers worked 63,000 hours at a rate of $13.00 per hour.c. Total variable manufacturing overhead for the month was $510,930.d. Total advertising, sales salaries and commissions, and shipping expenses were $286,000, $495,000, and $195,000,respectively.8. What is the direct labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)Direct labor rate variance

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Description: Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:$ 55.00Direct material: 5 pounds at $11.00 per poundDirect labor: 3 ho

Labour rate variance is difference between standard cost of Actual Labour hours and actual labour…

Answered: 8. What is the direct labor rate…

Business

Accounting

8. What is the direct labor rate variance for March?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

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:
$ 55.00
Direct material: 5 pounds at $11.00 per pound
Direct labor: 3 hours at $12 per hour
Variable overhead: 3 hours at $7 per hour
36.00
21.00
Total standard variable cost per unit
$112.00
The company also established the following cost formulas for its selling expenses:
Fixed Cost
Variable Cost
per Month
$ 280,000
$ 260,000
per Unit Sold
Advertising
Sales salaries and commissions
Shipping expenses
$ 20.00
$ 11.00
The planning budget for March was based on producing and selling 21,000 units. However, during March the company
actually produced and sold 26,600 units and incurred the following costs:
a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production.
b. Direct-laborers worked 63,000 hours at a rate of $13.00 per hour.
c. Total variable manufacturing overhead for the month was $510,930.
d. Total advertising, sales salaries and commissions, and shipping expenses were $286,000, $495,000, and $195,000,
respectively.
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.)
Direct labor rate variance

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Subject: accounting
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