Required Iformation The Foundatlonal 15 (LO9-1, LO9-2, LO9-4, LOD-5, LOD-6] [The following Information apples to the questions displayed below) Preble Company manufactures one product. Its varlable manufacturing overhead is applied to production based on direct. labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour $40.00 28.00 1e.00 Total standard variable cost per unit $78.00 The company also established the following cost formulas for Its selling expenses: Fixed Cost per Honth $ 200, 000 $ 100,000 Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 12.00 $ 3.00 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 varlable manufacturing overhead for the month was $280,500. d. Total advertising, sales salarles and commissions, and shipping expenses were $210,000, $455.000, and $115.000, respectively. Foundational 9-14 14. What is the spending varlance related to sales salaries and commislons? (Indicate the effect of each varlance by selecting "E" for Tavorable, "U" for unfavorable, and "None" for no effect (L.e., zero varlance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions
Required Iformation The Foundatlonal 15 (LO9-1, LO9-2, LO9-4, LOD-5, LOD-6] [The following Information apples to the questions displayed below) Preble Company manufactures one product. Its varlable manufacturing overhead is applied to production based on direct. labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour $40.00 28.00 1e.00 Total standard variable cost per unit $78.00 The company also established the following cost formulas for Its selling expenses: Fixed Cost per Honth $ 200, 000 $ 100,000 Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 12.00 $ 3.00 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 varlable manufacturing overhead for the month was $280,500. d. Total advertising, sales salarles and commissions, and shipping expenses were $210,000, $455.000, and $115.000, respectively. Foundational 9-14 14. What is the spending varlance related to sales salaries and commislons? (Indicate the effect of each varlance by selecting "E" for Tavorable, "U" for unfavorable, and "None" for no effect (L.e., zero varlance.). Input the amount as a positive value.) Spending variance related to sales salaries and commissions
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![**Required Information**
**The Foundational 15 [LO9-1, LO9-2, LO9-4, LO9-5, LO9-6]**
*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 material:** 5 pounds at $8.00 per pound = $40.00
- **Direct labor:** 2 hours at $14 per hour = $28.00
- **Variable overhead:** 2 hours at $5 per hour = $10.00
**Total standard variable cost per unit: $78.00**
The company also established the following cost formulas for its selling expenses:
| Cost Component | Fixed Cost per Month | Variable Cost per Unit Sold |
|------------------------|----------------------|-----------------------------|
| Advertising | $200,000 | $12.00 |
| Sales salaries and commissions | $100,000 | $3.00 |
| Shipping expenses | | $3.00 |
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.
d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000 respectively.
**Foundational 9-14**
14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect, i.e., zero variance.) Input the amount as a positive value.
**Spending variance related to sales salaries and commissions:** [ ]
**Instructions:**
- Analyze the provided costs and variances.
- Use the standard cost formulas and actual results to identify variances.
- Enter your findings related to sales salaries and commissions spending variance in the provided space.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b584b46-60b7-4976-9b0d-60d7ece40ffb%2F361a42ce-23c8-4583-a11d-921f3c418d96%2Fbeglrf3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Required Information**
**The Foundational 15 [LO9-1, LO9-2, LO9-4, LO9-5, LO9-6]**
*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 material:** 5 pounds at $8.00 per pound = $40.00
- **Direct labor:** 2 hours at $14 per hour = $28.00
- **Variable overhead:** 2 hours at $5 per hour = $10.00
**Total standard variable cost per unit: $78.00**
The company also established the following cost formulas for its selling expenses:
| Cost Component | Fixed Cost per Month | Variable Cost per Unit Sold |
|------------------------|----------------------|-----------------------------|
| Advertising | $200,000 | $12.00 |
| Sales salaries and commissions | $100,000 | $3.00 |
| Shipping expenses | | $3.00 |
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.
d. Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000 respectively.
**Foundational 9-14**
14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect, i.e., zero variance.) Input the amount as a positive value.
**Spending variance related to sales salaries and commissions:** [ ]
**Instructions:**
- Analyze the provided costs and variances.
- Use the standard cost formulas and actual results to identify variances.
- Enter your findings related to sales salaries and commissions spending variance in the provided space.
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