Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 4 kg at $9.00 per kg Direct labour: 3 hours at $12 per hour Variable overhead: 3 hours at $8 per hour Total standard cost per unit $36.00 36.00 24.00 $96.00 The company planned to produce and sell 28,000 units in March. However, during March the company actually produced and sold 33,000 units and incurred the following costs: a. Purchased 165,000 kg of raw materials at a cost of $7.20 per kg. All of this material was used in production. b. Direct labour: 58,000 hours at a rate of $13 per hour. c. Total variable manufacturing overhead for the month was $729,060. 2. What is the materials quantity 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.).)
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 4 kg at $9.00 per kg Direct labour: 3 hours at $12 per hour Variable overhead: 3 hours at $8 per hour Total standard cost per unit $36.00 36.00 24.00 $96.00 The company planned to produce and sell 28,000 units in March. However, during March the company actually produced and sold 33,000 units and incurred the following costs: a. Purchased 165,000 kg of raw materials at a cost of $7.20 per kg. All of this material was used in production. b. Direct labour: 58,000 hours at a rate of $13 per hour. c. Total variable manufacturing overhead for the month was $729,060. 2. What is the materials quantity 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.).)
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct
labour-hours, and its standard costs per unit are as follows:
Direct materials: 4 kg at $9.00 per kg
Direct labour: 3 hours at $12 per hour
Variable overhead: 3 hours at $8 per hour
Total standard cost per unit
$36.00
36.00
24.00
$96.00
The company planned to produce and sell 28,000 units in March. However, during March the company actually produced
and sold 33,000 units and incurred the following costs:
a. Purchased 165,000 kg of raw materials at a cost of $7.20 per kg. All of this material was used in production.
b. Direct labour: 58,000 hours at a rate of $13 per hour.
c. Total variable manufacturing overhead for the month was $729,060.
2. What is the materials quantity 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.).)
Materials quantity variance
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