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: $40.00 Direct material: 4 pounds at $10.00 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 12.00 Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost, per Unit Sold Fixed Cost per Month $ 270,000 $ 240,000 Advertising $19.00 Shipping expenses 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 $1700 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. 5. If Preble had purchased 177.000 pounds of materials at $9.20 per pound and used 150.000 pounds in production, what would be the materials price variance for March? (Indlcate the effect of each varlance by selectlng "F" for favorable, "U for unfavorable, and "None" for no etfect (I.e., zero varleance.). Input the amount as a positive value.) Materials pnce variance < Prev 15 of 15 ere to search, 近 F4 F5 F7 F10 Coc-a
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: $40.00 Direct material: 4 pounds at $10.00 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 12.00 Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost, per Unit Sold Fixed Cost per Month $ 270,000 $ 240,000 Advertising $19.00 Shipping expenses 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 $1700 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. 5. If Preble had purchased 177.000 pounds of materials at $9.20 per pound and used 150.000 pounds in production, what would be the materials price variance for March? (Indlcate the effect of each varlance by selectlng "F" for favorable, "U for unfavorable, and "None" for no etfect (I.e., zero varleance.). Input the amount as a positive value.) Materials pnce variance < Prev 15 of 15 ere to search, 近 F4 F5 F7 F10 Coc-a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text: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:
$40.00
Direct material: 4 pounds at $10.00 per pound
Direct labor: 2 hours at $16 per hour
Variable overhead: 2 hours at $6 per hour
12.00
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Variable Cost,
per Unit Sold
Fixed Cost
per Month
$ 270,000
$ 240,000
Advertising
$19.00
Shipping expenses
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 $1700 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.
5. If Preble had purchased 177.000 pounds of materials at $9.20 per pound and used 150.000 pounds in production, what would be
the materials price variance for March? (Indlcate the effect of each varlance by selectlng "F" for favorable, "U for unfavorable, and
"None" for no etfect (I.e., zero varleance.). Input the amount as a positive value.)
Materials pnce variance
< Prev
15 of 15
ere to search,
近
F4
F5
F7
F10
Coc-a
Expert Solution
Step 1
Material price variance = (Actual price per pound - Standard price per pound)*Actual quantity purchased
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