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 $36.00 45.00 18.00 $99.00 the company any also established the following cost formulas for its
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 $36.00 45.00 18.00 $99.00 the company any also established the following cost formulas for its
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
Fixed Cost
per Month
$36.00
45.00
18.00
$99.00
$ 210,000
$ 120,000
Variable manufacturing overhead cost
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:
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.
9. What variable manufacturing overhead cost would be included in the company's
flexible budget for March?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4119fedc-b5ba-442d-99f8-6b329401f211%2F8a02996b-c5d6-45d8-891b-7bbb04ebd938%2Frjpapnc_processed.jpeg&w=3840&q=75)
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
Fixed Cost
per Month
$36.00
45.00
18.00
$99.00
$ 210,000
$ 120,000
Variable manufacturing overhead cost
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:
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.
9. What variable manufacturing overhead cost would be included in the company's
flexible budget for March?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education