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: Inputs Direct materials Direct labor Variable overhead Total standard cost per unit (1) Standard Quantity or Hours (2) Standard Price or Rate Standard Cost (1) × (2) 5 pounds $8.00 per pound $40.00 2 hours $14 per hour 28.00 2 hours $5 per hour 10.00 $78.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500.

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: Inputs Direct materials Direct labor Variable overhead Total standard cost per unit (1) Standard Quantity or Hours (2) Standard Price or Rate Standard Cost (1) × (2) 5 pounds $8.00 per pound $40.00 2 hours $14 per hour 28.00 2 hours $5 per hour 10.00 $78.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500.

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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