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 so per hour 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 References Foundational 10-1 (Algo) Required: 1. What raw materials cost would be included in the company's planning budget 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: 4 pounds at $10 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at so per hour 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 References Foundational 10-1 (Algo) Required: 1. What raw materials cost would be included in the company's planning budget for March?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 so per hour
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
References
Foundational 10-1 (Algo)
Required:
1. What raw materials cost would be included in the company's planning budget for March?
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