Required Information The Foundational 15 (LOO-1, LO9-2, LO9-4, LO0-5, LO9-6) The followtng Information applies 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 aterial: 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 18.00 Total standard variable cost per unit $78.00 The company also established the following cost formulas for Its selling expenses: Fixed Cost Variable Cost per Month $ 200, e0e $ 100,000 per Unit Sold Advertising Sales salaries and commissions $ 12.ee $ 3.ee Shipping expenses 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. Foundatlonal 9-13 13. What is the spending varlance related to advertising? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance.). Input the amount as a positive value.) Spending variance related to advertising
Required Information The Foundational 15 (LOO-1, LO9-2, LO9-4, LO0-5, LO9-6) The followtng Information applies 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 aterial: 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 18.00 Total standard variable cost per unit $78.00 The company also established the following cost formulas for Its selling expenses: Fixed Cost Variable Cost per Month $ 200, e0e $ 100,000 per Unit Sold Advertising Sales salaries and commissions $ 12.ee $ 3.ee Shipping expenses 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. Foundatlonal 9-13 13. What is the spending varlance related to advertising? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance.). Input the amount as a positive value.) Spending variance related to advertising
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
The Foundational 15 (LOD-1, LO9-2, LO9-4, LO9-5, LO9-6]
[The following Information applles to the questions displayed below.]
Preble Company manufactures one product Its varlable manufacturing overhead Is appled 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
Total standard variable cost per unit
$40.00
28.00
10.00
$78.00
The company also established the followlng cost formulas for Its selling expenses:
Fixed Cost
per Month
$ 200,000
$ 100,000
Variable Cost
per Unit Sold
Advertising
Sales salaries and cotunissions
Shipping expenses
$ 12.00
$ 3.00
The planning budget for March was based on producing and selling 25,000 unlts. However, during March the company
actually produced and sold 30,000 unlts and Incurred the following costs:
a. Purchased 160,000 pounds of raw materlals at a cost of $7.50 per pound. All of this materlal was used In productlon.
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 commisslons, and shlpping expenses were $210,000, $455,000, and $115.000,
respectively.
Foundational 9-13
13. What Is the spending varlance related to advertising? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (I.e., zero varlance.). Input the amount as a posltive value.)
Spending variance related to advertising
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Transcribed Image Text:Required Information
The Foundational 15 (LOD-1, LO9-2, LO9-4, LO9-5, LO9-6]
[The following Information applles to the questions displayed below.]
Preble Company manufactures one product Its varlable manufacturing overhead Is appled 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
Total standard variable cost per unit
$40.00
28.00
10.00
$78.00
The company also established the followlng cost formulas for Its selling expenses:
Fixed Cost
per Month
$ 200,000
$ 100,000
Variable Cost
per Unit Sold
Advertising
Sales salaries and cotunissions
Shipping expenses
$ 12.00
$ 3.00
The planning budget for March was based on producing and selling 25,000 unlts. However, during March the company
actually produced and sold 30,000 unlts and Incurred the following costs:
a. Purchased 160,000 pounds of raw materlals at a cost of $7.50 per pound. All of this materlal was used In productlon.
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 commisslons, and shlpping expenses were $210,000, $455,000, and $115.000,
respectively.
Foundational 9-13
13. What Is the spending varlance related to advertising? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (I.e., zero varlance.). Input the amount as a posltive value.)
Spending variance related to advertising
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