Required Information [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 $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses $ 50.00 64.00 28.00 $ 142.00 Variable Fixed Cost per cost per Month Unit Sold $ 220,000 $ 140,000 $ 14.00 $ 5.00 The planning budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 24,600 units and incurred the following costs: v material cost a. Purchased 164,000 pounds of raw materials at a cost of $750 per pound. All of this material was used in production. b. Direct-laborers worked 57,000 hours at a rate of $17.00 per hour c. Total variable manufacturing overhead for the month was $653,220 d. Total advertising, sales salaries and commissions, and shipping expenses were $235,000, $465,000, and $135,000, respectively uired: at raw materials cost would be included in the company's flexible budget for March?
Required Information [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 $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses $ 50.00 64.00 28.00 $ 142.00 Variable Fixed Cost per cost per Month Unit Sold $ 220,000 $ 140,000 $ 14.00 $ 5.00 The planning budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 24,600 units and incurred the following costs: v material cost a. Purchased 164,000 pounds of raw materials at a cost of $750 per pound. All of this material was used in production. b. Direct-laborers worked 57,000 hours at a rate of $17.00 per hour c. Total variable manufacturing overhead for the month was $653,220 d. Total advertising, sales salaries and commissions, and shipping expenses were $235,000, $465,000, and $135,000, respectively uired: at raw materials cost would be included in the company's flexible budget for March?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
[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 $10.00 per pound
Direct labor: 4 hours at $16 per hour
Variable overhead: 4 hours at $7 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Advertising
Sales salaries and commissions
Shipping expenses
Fixed Cost per
Month
$ 220,000
$ 140,000
$ 50.00
64.00
28.00
$ 142.00
Raw material cost
Variable
cost per
Unit Sold
$ 14.00
$5.00
The planning budget for March was based on producing and selling 20,000 units. However, during March the company
actually produced and sold 24,600 units and incurred the following costs:
a. Purchased 164,000 pounds of raw materials at a cost of $750 per pound. All of this material was used in production.
b. Direct-laborers worked 57,000 hours at a rate of $17.00 per hour.
c. Total variable manufacturing overhead for the month was $653,220.
d. Total advertising, sales salaries and commissions, and shipping expenses were $235,000, $465,000, and $135,000,
respectively
Required:
1. What raw materials cost would be included in the company's flexible budget for March?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe0c0daf4-9cc0-4d1c-b755-2eb03b390c67%2Faff739de-3b94-455b-be08-d15a61aae68e%2Fr42d73i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
[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 $10.00 per pound
Direct labor: 4 hours at $16 per hour
Variable overhead: 4 hours at $7 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Advertising
Sales salaries and commissions
Shipping expenses
Fixed Cost per
Month
$ 220,000
$ 140,000
$ 50.00
64.00
28.00
$ 142.00
Raw material cost
Variable
cost per
Unit Sold
$ 14.00
$5.00
The planning budget for March was based on producing and selling 20,000 units. However, during March the company
actually produced and sold 24,600 units and incurred the following costs:
a. Purchased 164,000 pounds of raw materials at a cost of $750 per pound. All of this material was used in production.
b. Direct-laborers worked 57,000 hours at a rate of $17.00 per hour.
c. Total variable manufacturing overhead for the month was $653,220.
d. Total advertising, sales salaries and commissions, and shipping expenses were $235,000, $465,000, and $135,000,
respectively
Required:
1. What raw materials cost would be included in the company's flexible budget for March?
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