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 $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: Fixed Cost Variable Cost per Month per Unit Sold. Advertising Sales salaries and commissions Shipping expenses $ 19.00 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. 11. What is the variable overhead rate variance for March? (Inclcete the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero varlance.). Input the emount as a positive value.) Nariable overhead rate variance < Prev 11 12 13 15 of 15 E Next e to search 71L
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 $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: Fixed Cost Variable Cost per Month per Unit Sold. Advertising Sales salaries and commissions Shipping expenses $ 19.00 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. 11. What is the variable overhead rate variance for March? (Inclcete the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero varlance.). Input the emount as a positive value.) Nariable overhead rate variance < Prev 11 12 13 15 of 15 E Next e to search 71L
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
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:
Fixed Cost
Variable Cost
per Month
per Unit Sold.
Advertising
Sales salaries and commissions
Shipping expenses
$ 19.00
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.
11. What is the variable overhead rate variance for March? (Inclcete the effect of each varlance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (1.e., zero varlance.). Input the emount as a positive value.)
Nariable overhead rate variance
< Prev
11 12 13 15
of 15
E Next
e to search
71L
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