[The foll Preble Company manufactures one product. Its variable manufacturing overhead is applied to production basec direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit $50.00 30.00 10.00 $90.00 The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750.
[The foll Preble Company manufactures one product. Its variable manufacturing overhead is applied to production basec direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit $50.00 30.00 10.00 $90.00 The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![[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 labour-hours, and its standard costs per unit are as follows:
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
4. If Preble had purchased 190,000 kg of materials at $9.40 per kg and used 200,000 kg in production, what would be the materials
each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for
quantity variance for March? (Indicate the effect
no effect (i.e., zero variance.). Do not round intermediate calculations.)
Materials quantity variance
$50.00
30.00
10.00
$90.00
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Transcribed Image Text:[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 labour-hours, and its standard costs per unit are as follows:
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
4. If Preble had purchased 190,000 kg of materials at $9.40 per kg and used 200,000 kg in production, what would be the materials
each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for
quantity variance for March? (Indicate the effect
no effect (i.e., zero variance.). Do not round intermediate calculations.)
Materials quantity variance
$50.00
30.00
10.00
$90.00
< Prev
4
6
8
of 8
‒‒‒
H
Next >
?
![i
Requirea information
[The following information applies to the questions displayed below.]
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on
direct labour-hours, and its standard costs per unit are as follows:
Saved
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
Materials price variance
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
< Prev
$50.00
30.00
10.00
$90.00
3
3. If Preble had purchased 190,000 kg of materials at $9.40 per kg and used 200,000 kg in production, what would be the materials
price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance.). Do not round intermediate calculations.)
5
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Transcribed Image Text:i
Requirea information
[The following information applies to the questions displayed below.]
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on
direct labour-hours, and its standard costs per unit are as follows:
Saved
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
Materials price variance
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
< Prev
$50.00
30.00
10.00
$90.00
3
3. If Preble had purchased 190,000 kg of materials at $9.40 per kg and used 200,000 kg in production, what would be the materials
price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance.). Do not round intermediate calculations.)
5
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