**Required information**_[The following information applies to the questions displayed below.]_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 materials:** 4 pounds at $10 per pound = **$40**- **Direct labor:** 2 hours at $16 per hour = **$32**- **Variable overhead:** 2 hours at $6 per hour = **$12****Total standard cost per unit = $84**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 per hour.c. Total variable manufacturing overhead for the month was $390,600.**3. What is the materials price variance for March?** _(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)_- **Materials price variance [_________]**

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Description: **Required information**_[The following information applies to the questions displayed below.]_Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost ca

Solution: Materials price variance = (Standard price - Actual price) * Actual quantity purchased

Business

Accounting

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production labor-hours and its standard cost card per unit is as follows: $ 40 Direct materials: 4 pounds at $10 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 32 12 Total standard cost per unit $ 84 The planning budget for March was based on producing and selling 30,000 units. However, during March 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 b. Direct laborers worked 62,000 hours at a rate of $17 per hour. tano cO

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production labor-hours and its standard cost card per unit is as follows: $ 40 Direct materials: 4 pounds at $10 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 32 12 Total standard cost per unit $ 84 The planning budget for March was based on producing and selling 30,000 units. However, during March 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 b. Direct laborers worked 62,000 hours at a rate of $17 per hour. tano cO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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