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[The following Information applies to the questions displayed below] Preble Company manufactures one product ts varlable manufacturing overhead is appled to production based on direct labor-hours and ts standard cost card per unit is as follows: Direct material: 5 pounds at $8.8e per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at SS per hour $40. 00 28.00 10.00 $78.00 Total standacd varfable cost per unit The company also established the following cost formulas for ns selling expenses: Variable Cost per Unit Sold Fixed Cost Advertising Sales salarles and connissions Shipping expenises per Month $ 200,000 $ 100,eee $ 12.00 S 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 $750 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 wat $280,500 d. Total advertistng, sales salarles and commissions, and shipping expenses were $210.000, $455,000, and S115.000. respectively. Foundational 9-12 12 What amounts of advertising, sales salarles and commissions, and shipping expenses would be Included in the company's flextble budget for March? Advenising Sales salanes and commissions Shipping expenses

[The following Information applies to the questions displayed below] Preble Company manufactures one product ts varlable manufacturing overhead is appled to production based on direct labor-hours and ts standard cost card per unit is as follows: Direct material: 5 pounds at $8.8e per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at SS per hour $40. 00 28.00 10.00 $78.00 Total standacd varfable cost per unit The company also established the following cost formulas for ns selling expenses: Variable Cost per Unit Sold Fixed Cost Advertising Sales salarles and connissions Shipping expenises per Month $ 200,000 $ 100,eee $ 12.00 S 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 $750 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 wat $280,500 d. Total advertistng, sales salarles and commissions, and shipping expenses were $210.000, $455,000, and S115.000. respectively. Foundational 9-12 12 What amounts of advertising, sales salarles and commissions, and shipping expenses would be Included in the company's flextble budget for March? Advenising Sales salanes and commissions Shipping expenses

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Manufacturing and Selling Costs Overview** Preble Company manufactures one product. In the production process, manufacturing overhead is applied based on direct labor-hours, and the standard cost card per unit is detailed 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 cost formulas for selling expenses, which include both fixed and variable components: | Cost Element | Fixed Cost per Month | Variable Cost per Unit Sold | |--------------------------------|----------------------|-----------------------------| | Advertising | $200,000 | $0.00 | | Sales Salaries and Commissions | $100,000 | $12.00 | | Shipping Expenses | $3.00 | | **March Production and Sales Details:** The planning budget for March was based on the production and sale of 25,000 units. However, the actual production and sales were 30,000 units, leading to the following expenses: a. **Raw Materials:** 160,000 pounds purchased at $7.50 per pound, all used in production. b. **Direct Labor:** 55,000 hours at $15.00 per hour. c. **Variable Manufacturing Overhead:** Actual amount was $280,500. d. **Total Selling Expenses:** Advertising ($210,000), Sales Salaries and Commissions ($455,000), Shipping Expenses ($115,000). **Question 12:** *What amounts of advertising, sales salaries and commissions, and shipping expenses would be included in the company’s flexible budget for March?* - **Advertising:** Remains constant at $200,000 as it is a fixed cost. - **Sales Salaries and Commissions:** Calculated as $100,000 (fixed) + ($12.00 * 30,000 units) = $460,000. - **Shipping Expenses:** Calculated as $3.00 * 30,000 units = $90,000. This breakdown helps in understanding the implications of actual and budgeted costs, crucial for variance analysis and cost control in manufacturing.
Transcribed Image Text:**Manufacturing and Selling Costs Overview** Preble Company manufactures one product. In the production process, manufacturing overhead is applied based on direct labor-hours, and the standard cost card per unit is detailed 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 cost formulas for selling expenses, which include both fixed and variable components: | Cost Element | Fixed Cost per Month | Variable Cost per Unit Sold | |--------------------------------|----------------------|-----------------------------| | Advertising | $200,000 | $0.00 | | Sales Salaries and Commissions | $100,000 | $12.00 | | Shipping Expenses | $3.00 | | **March Production and Sales Details:** The planning budget for March was based on the production and sale of 25,000 units. However, the actual production and sales were 30,000 units, leading to the following expenses: a. **Raw Materials:** 160,000 pounds purchased at $7.50 per pound, all used in production. b. **Direct Labor:** 55,000 hours at $15.00 per hour. c. **Variable Manufacturing Overhead:** Actual amount was $280,500. d. **Total Selling Expenses:** Advertising ($210,000), Sales Salaries and Commissions ($455,000), Shipping Expenses ($115,000). **Question 12:** *What amounts of advertising, sales salaries and commissions, and shipping expenses would be included in the company’s flexible budget for March?* - **Advertising:** Remains constant at $200,000 as it is a fixed cost. - **Sales Salaries and Commissions:** Calculated as $100,000 (fixed) + ($12.00 * 30,000 units) = $460,000. - **Shipping Expenses:** Calculated as $3.00 * 30,000 units = $90,000. This breakdown helps in understanding the implications of actual and budgeted costs, crucial for variance analysis and cost control in manufacturing.
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