!Required informationThe Foundational 15 (Algo) [LO10-1, LO10-2, LO10-3][The following information applies to the questions displayed below.]Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on directlabor-hours and its standard cost card per unit is as follows:Direct materials: 6 pounds at $8 per poundDirect labor: 4 hours at $17 per hourVariable overhead: 4 hours at $4 per hourTotal standard cost per unit$486816$ 132The planning budget for March was based on producing and selling 19,000 units. However, during March the companyactually produced and sold 24,000 units and incurred the following costs:a. Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.b. Direct laborers worked 72,000 hours at a rate of $18 per hour.c. Total variable manufacturing overhead for the month was $336,960.Foundational 10-15 (Algo)15. What is the variable overhead efficiency variance for March? (Round the actual overhead rate to two decimal places. Indicate theeffect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input allamounts as positive values.)Variable overhead efficiency variance

Variance is the difference between the expected result and the actual results. In simple, it is the…

Answered: Preble Company manufactures one…

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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Patel and Sons Incorporated uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 20,000 units, which took 41,000 machine hours. Actual fixed factory overhead costs for the year amounted to $245,000, while the actual variable overhead cost per unit was $3.90. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 51,600 machine hours per year, which represents 25,800 units of output. Annual budgeted fixed factory overhead costs are $258,000 and the budgeted variable factory overhead cost rate is $2.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 19,500 units, which took 40,600 machine hours. Actual fixed factory overhead costs for the year amounted to $251,600 while the actual variable overhead cost per unit was $2.40. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…
Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, eg. 2.75.) Predetermined Overhead Rate (b) eTextbook and Media Compute the applied overhead for Crane for the year. Overhead Applied Variable $ 2.50 Fixed Attempts: 1 of 3 used
Dubberly Corporation's cost formula for its manufacturing overhead is $32,300 per month plus $52 per machine-hour. For the month of March, the company planned for activity of 7,860 machine-hours, but the actual level of activity was 7,780 machine-hours. The actual manufacturing overhead for the month was $465,470. The activity variance for manufacturing overhead in March would be closest to: Multiple Choice $24,450 U $4,160 F $4,160 U $24,450 F
Dubberly Corporation's cost formula for its manufacturing overhead is $32,100 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,820 machine-hours, but the actual level of activity was 7,760 machine-hours. The actual manufacturing overhead for the month was $556,790. The activity variance for manufacturing overhead in March would be closest to: Multiple Cholce $24,210 U $24,210 F $3,840 F $3,840 U
Sharp Company manufactures a product for which the following standards have been set: Standard Quantity or Hours 3 feet ? hours Direct materials Direct labor Standard Price Standard or Rate Cost $ 15 ? Materials quantity variance Labor spending variance Labor efficiency variance $5 per foot ? per hour During March, the company purchased direct materials at a cost of $53,730, all of which were used in the production of 2,875 units of product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $37,600. The following variances have been computed for the month: $ 1,650 U $ 3,100 U $ 750 U Required: 1. For direct materials: a. Compute the actual cost per foot of materials for March. b. Compute the price variance and the spending variance. 2. For direct labor: a. Compute the standard direct labor rate per hour. b. Compute the standard hours allowed for the month's production. c. Compute the standard hours allowed per unit of…
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: 5 pounds at $9 per pound Direct labor: 3 hours at $14 per hour Variable overhead: 3 hours at $8 per hour Total standard cost per unit $ 45 42 24 $ 111 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 per hour. c. Total variable manufacturing overhead for the month was $565,110. 13. What variable manufacturing overhead cost would be included in the company's flexible budget for March? Variable manufacturing overhead cost
Morris Company allocates manufacturing overhead based on machine hours. Each chair produced should require 4 machine hours. According to the static budget, the following is expected to incur: 2,200 machine hours per month (550 chairs x 4 hours per chair) $11,440 in variable manufacturing overhead costs $9,000 in fixed manufacturing overhead costs During January, Morris Company actually used 2,100 machine hours to make 510 chairs. The company spent $6,800 in variable manufacturing overhead costs and $9,100 in fixed manufacturing overhead costs. What is the fixed overhead cost variance?
Krump Corporation's cost formula for its manufacturing overhead is $30,600 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,900 machine-hours, but the actual level of activity was 7,880 machine- hours. The actual manufacturing overhead for the month was $558,610. The activity variance for manufacturing overhead in March would be closest to: O $22,410 U $22,410 F O $1,280 F O $1,280 U
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 Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour $ 40 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 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. 11. What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for…
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: 6 pounds at $8 per pound $ 48 Direct labor: 4 hours at $17 per hour 68 Variable overhead: 4 hours at $4 per hour 16 Total standard cost per unit $ 132 The planning budget for March was based on producing and selling 19,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs: Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. Direct laborers worked 72,000 hours at a rate of $18 per hour. Total variable manufacturing overhead for the month was $336,960. 1. What raw materials cost would be included in the company’s planning budget for March? 2. What raw materials cost would be included in the company’s flexible budget for March? 3. What is the…

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