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Direct material: 5 pounds at $9.00 per pound Direct labor: 3 hours at $14 per hour Variable overhead: 3 hours at $8 per hour Total standard variable cost per unit $ 45.00 42.00 24.00 $ 111.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Variable Fixed Cost per Cost per Month Unit Sold $ 340,000 $ 380,000 $ 26.00 $ 17.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. b. Direct-laborers worked 69,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $565,110. d. Total advertising, sales salaries and commissions, and shipping expenses were $345,000, $525,000, and $255,000, respectively. Foundational 9-14 (Algo) 14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions

Direct material: 5 pounds at $9.00 per pound Direct labor: 3 hours at $14 per hour Variable overhead: 3 hours at $8 per hour Total standard variable cost per unit $ 45.00 42.00 24.00 $ 111.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Variable Fixed Cost per Cost per Month Unit Sold $ 340,000 $ 380,000 $ 26.00 $ 17.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. b. Direct-laborers worked 69,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $565,110. d. Total advertising, sales salaries and commissions, and shipping expenses were $345,000, $525,000, and $255,000, respectively. Foundational 9-14 (Algo) 14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Direct material: 5 pounds at $9.00 per pound Direct labor: 3 hours at $14 per hour Variable overhead: 3 hours at $8 per hour Total standard variable cost per unit $ 45.00 42.00 24.00 $ 111.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Variable Fixed Cost per Cost per Month Unit Sold $ 340,000 $ 380,000 $ 26.00 $ 17.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. b. Direct-laborers worked 69,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $565,110. d. Total advertising, sales salaries and commissions, and shipping expenses were $345,000, $525,000, and $255,000, respectively. Foundational 9-14 (Algo) 14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions
Transcribed Image Text:Direct material: 5 pounds at $9.00 per pound Direct labor: 3 hours at $14 per hour Variable overhead: 3 hours at $8 per hour Total standard variable cost per unit $ 45.00 42.00 24.00 $ 111.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Variable Fixed Cost per Cost per Month Unit Sold $ 340,000 $ 380,000 $ 26.00 $ 17.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. b. Direct-laborers worked 69,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $565,110. d. Total advertising, sales salaries and commissions, and shipping expenses were $345,000, $525,000, and $255,000, respectively. Foundational 9-14 (Algo) 14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions
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