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 $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $ $ 50 56 16 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs: 1. Purchased 180,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. 2. Direct laborers worked 74,000 hours at a rate of $15 per hour. 3. Total variable manufacturing overhead for the month was $440,300. 5. If Preble had purchased 189,000 pounds of materials at $9.50 per pound and used 180,000 pounds in production, what would be the materials price variance for March?
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 $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $ $ 50 56 16 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs: 1. Purchased 180,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. 2. Direct laborers worked 74,000 hours at a rate of $15 per hour. 3. Total variable manufacturing overhead for the month was $440,300. 5. If Preble had purchased 189,000 pounds of materials at $9.50 per pound and used 180,000 pounds in production, what would be the materials price variance for March?
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 labor-hours
and its standard cost card per unit is as follows:
Direct materials: 5 pounds at $10 per pound.
Direct labor: 4 hours at $14 per hour.
Variable overhead: 4 hours at $4 per hour
Total standard cost per unit
$
$
50
56
16
122
The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually
produced and sold 34,200 units and incurred the following costs:
1. Purchased 180,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production.
2 Direct laborers worked 74,000 hours at a rate of $15 per hour.
3. Total variable manufacturing overhead for the month was $440,300.
5. If Preble had purchased 189,000 pounds of materials at $9.50 per pound and used 180,000 pounds in production, what would be
the materials price variance for March?
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