ctures 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 $9.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $6 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $36.00 45.00 18.00 $ 99.00 $ 210,000 $ 120,000 Variable Cost per Unit Sold riable overhead efficiency variance $ 13.00 $4.00 The planning budget for March was based on producing and selling 26,000 units. However, during March the company actually produced and sold 31,000 units and incurred the following costs: a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. b. Direct-laborers worked 56,000 hours at a rate of $16.00 per hour. c. Total variable manufacturing overhead for the month was $524,720. d. Total advertising, sales salaries and commissions, and shipping expenses were $220,000, $460,000, and $125,000, respectively. What is the variable overhead efficiency variance for March? (Indicate the effect ch variance by selecting "F" for favorable, "U" for unfavorable, and "None" for r ect (i.e., zero variance.). Input the amount as a positive value.)
ctures 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 $9.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $6 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $36.00 45.00 18.00 $ 99.00 $ 210,000 $ 120,000 Variable Cost per Unit Sold riable overhead efficiency variance $ 13.00 $4.00 The planning budget for March was based on producing and selling 26,000 units. However, during March the company actually produced and sold 31,000 units and incurred the following costs: a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. b. Direct-laborers worked 56,000 hours at a rate of $16.00 per hour. c. Total variable manufacturing overhead for the month was $524,720. d. Total advertising, sales salaries and commissions, and shipping expenses were $220,000, $460,000, and $125,000, respectively. What is the variable overhead efficiency variance for March? (Indicate the effect ch variance by selecting "F" for favorable, "U" for unfavorable, and "None" for r ect (i.e., zero variance.). Input the amount as a positive value.)
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 $9.00 per pound
Direct labor: 3 hours at $15 per hour
Variable overhead: 3 hours at $6 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its
selling expenses:
Advertising
Sales salaries and commissions
Shipping expenses
$36.00
45.00
18.00
$99.00
Fixed Cost
per Month
$ 210,000
$ 120,000
Variable
Cost per
Unit Sold
$ 13.00
$ 4.00
The planning budget for March was based on producing and selling
26,000 units. However, during March the company actually produced
and sold 31,000 units and incurred the following costs:
Variable overhead efficiency variance
a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per
pound. All of this material was used in production.
b. Direct-laborers worked 56,000 hours at a rate of $16.00 per hour.
c. Total variable manufacturing overhead for the month was
$524,720.
d. Total advertising, sales salaries and commissions, and shipping
expenses were $220,000, $460,000, and $125,000, respectively.
D. What is the variable overhead efficiency variance for March? (Indicate the effect of
ach variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
ffect (i.e., zero variance.). Input the amount as a positive value.)
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