LL 3. 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 $19.00 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 32.00 Total standard variable cost per unit $84.00 The company also established the following cost formulas for its selling expenses: Variable Cost Fixed Cost per Month per Unit Sold Advertising Sales salaries and commissions, Shipping expenses, $ 240,000 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct-laborers worked 62,000 hours at a rate of $17.00 per hour. C. Total variable manufacturing overhead for the month was $390,600, d. Total advertising, sales salaries and commissions, and shipping expenses were $280,000, $490,000, and $185,000, respectively. 14. What is the spending variance related to sales salaries and commissions? (Indicete the effect of each verlence by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero verlance.). Input the amount os a positive value.) Spending variance related to sales salaries and commissions ere to search TL F4 F5 F7 F8 F11
LL 3. 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 $19.00 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 32.00 Total standard variable cost per unit $84.00 The company also established the following cost formulas for its selling expenses: Variable Cost Fixed Cost per Month per Unit Sold Advertising Sales salaries and commissions, Shipping expenses, $ 240,000 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct-laborers worked 62,000 hours at a rate of $17.00 per hour. C. Total variable manufacturing overhead for the month was $390,600, d. Total advertising, sales salaries and commissions, and shipping expenses were $280,000, $490,000, and $185,000, respectively. 14. What is the spending variance related to sales salaries and commissions? (Indicete the effect of each verlence by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero verlance.). Input the amount os a positive value.) Spending variance related to sales salaries and commissions ere to search TL F4 F5 F7 F8 F11
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:LL
3.
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 $19.00 per pound
Direct labor: 2 hours at $16 per hour
Variable overhead: 2 hours at $6 per hour
32.00
Total standard variable cost per unit
$84.00
The company also established the following cost formulas for its selling expenses:
Variable Cost
Fixed Cost
per Month
per Unit Sold
Advertising
Sales salaries and commissions,
Shipping expenses,
$ 240,000
The planning budget for March was based on producing and selling 30,000 units. However, during March the company
actually produced and sold 34,500 units and incurred the following costs:
a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production.
b. Direct-laborers worked 62,000 hours at a rate of $17.00 per hour.
C. Total variable manufacturing overhead for the month was $390,600,
d. Total advertising, sales salaries and commissions, and shipping expenses were $280,000, $490,000, and $185,000,
respectively.
14. What is the spending variance related to sales salaries and commissions? (Indicete the effect of each verlence by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (I.e., zero verlance.). Input the amount os a positive value.)
Spending variance related to sales salaries and commissions
<Prev
14 15
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ere to search
TL
F4
F5
F7
F8
F11
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