### Preble Company Cost Information **Standard Cost Card per Unit:** - **Direct Material:** - 4 pounds at $10.00 per pound = $40.00 - **Direct Labor:** - 2 hours at $16 per hour = $32.00 - **Variable Overhead:** - 2 hours at $6 per hour = $12.00 **Total Standard Variable Cost per Unit:** $84.00 --- **Selling Expenses Cost Formulas:** | | Fixed Cost per Month | Variable Cost per Unit Sold | |-------------------------|----------------------|-----------------------------| | Advertising | $270,000 | $0 | | Sales Salaries and Commissions | $240,000 | $19.00 | | Shipping Expenses | | $10.00 | --- **March Budget and Actuals:** - **Planned Production and Sales:** 30,000 units. - **Actual Production and Sales:** 34,500 units. **Actual Costs Incurred:** a. Purchased 150,000 pounds of raw materials at $9.20 per pound (all used in production). b. Direct-labor workers worked 62,000 hours at a rate of $17.00 per hour. c. Total variable manufacturing overhead for March: $399,600. d. Actual advertising, sales salaries and commissions, and shipping expenses: $280,000, $490,000, and $185,000, respectively. --- **Variance Analysis:** - **Materials Quantity Variance:** - Calculation and indication of each variance effect such as "F" for favorable, "U" for unfavorable, or "None" for no effect. Input values as positive numbers.
### Preble Company Cost Information **Standard Cost Card per Unit:** - **Direct Material:** - 4 pounds at $10.00 per pound = $40.00 - **Direct Labor:** - 2 hours at $16 per hour = $32.00 - **Variable Overhead:** - 2 hours at $6 per hour = $12.00 **Total Standard Variable Cost per Unit:** $84.00 --- **Selling Expenses Cost Formulas:** | | Fixed Cost per Month | Variable Cost per Unit Sold | |-------------------------|----------------------|-----------------------------| | Advertising | $270,000 | $0 | | Sales Salaries and Commissions | $240,000 | $19.00 | | Shipping Expenses | | $10.00 | --- **March Budget and Actuals:** - **Planned Production and Sales:** 30,000 units. - **Actual Production and Sales:** 34,500 units. **Actual Costs Incurred:** a. Purchased 150,000 pounds of raw materials at $9.20 per pound (all used in production). b. Direct-labor workers worked 62,000 hours at a rate of $17.00 per hour. c. Total variable manufacturing overhead for March: $399,600. d. Actual advertising, sales salaries and commissions, and shipping expenses: $280,000, $490,000, and $185,000, respectively. --- **Variance Analysis:** - **Materials Quantity Variance:** - Calculation and indication of each variance effect such as "F" for favorable, "U" for unfavorable, or "None" for no effect. Input values as positive numbers.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:### Preble Company Cost Information
**Standard Cost Card per Unit:**
- **Direct Material:**
- 4 pounds at $10.00 per pound = $40.00
- **Direct Labor:**
- 2 hours at $16 per hour = $32.00
- **Variable Overhead:**
- 2 hours at $6 per hour = $12.00
**Total Standard Variable Cost per Unit:** $84.00
---
**Selling Expenses Cost Formulas:**
| | Fixed Cost per Month | Variable Cost per Unit Sold |
|-------------------------|----------------------|-----------------------------|
| Advertising | $270,000 | $0 |
| Sales Salaries and Commissions | $240,000 | $19.00 |
| Shipping Expenses | | $10.00 |
---
**March Budget and Actuals:**
- **Planned Production and Sales:** 30,000 units.
- **Actual Production and Sales:** 34,500 units.
**Actual Costs Incurred:**
a. Purchased 150,000 pounds of raw materials at $9.20 per pound (all used in production).
b. Direct-labor workers worked 62,000 hours at a rate of $17.00 per hour.
c. Total variable manufacturing overhead for March: $399,600.
d. Actual advertising, sales salaries and commissions, and shipping expenses: $280,000, $490,000, and $185,000, respectively.
---
**Variance Analysis:**
- **Materials Quantity Variance:**
- Calculation and indication of each variance effect such as "F" for favorable, "U" for unfavorable, or "None" for no effect. Input values as positive numbers.
Expert Solution
Step 1
Material Quantity Variance - It is the difference between the actual amount of materials used and the amount that is expected to be used.
Formula = (Actual Quantity - Standard Quantity) x Standard Cost per Unit
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education