[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 Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 40.00 45.00 27.00 $112.00 Fixed Cost per Month $ 350,000 $ 400,000 $ 27.00 $18.00 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour. Direct labor cost c. Total variable manufacturing overhead for the month was $655,200. d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000, respectively. 6. What direct labor cost would be included in the company's flexible budget for March? S --- HH Next >
[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 Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 40.00 45.00 27.00 $112.00 Fixed Cost per Month $ 350,000 $ 400,000 $ 27.00 $18.00 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour. Direct labor cost c. Total variable manufacturing overhead for the month was $655,200. d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000, respectively. 6. What direct labor cost would be included in the company's flexible budget for March? S --- HH Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![[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
Direct labor: 3 hours at $15 per hour
Variable overhead: 3 hours at $9 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Variable
Cost per
Unit Sold
Advertising
Sales salaries and commissions
Shipping expenses
Fixed Cost
per Month
$ 350,000
$ 400,000
$ 40.00
45.00
27.00
$112.00
The planning budget for March was based on producing and selling 21,000 units. However, during March the company
actually produced and sold 26,000 units and incurred the following costs:
Direct labor cost
$ 27.00
$18.00
a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production.
b. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour.
c. Total variable manufacturing overhead for the month was $655,200.
d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000,
respectively.
6. What direct labor cost would be included in the company's flexible budget for March?
Prev
67
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HH
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C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F944561e4-8cc0-410d-b694-ee45d23b08da%2Fa4b78ebd-f611-4cd8-b85a-4f882d71a515%2Flghqdns_processed.jpeg&w=3840&q=75)
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
labor-hours and its standard cost card per unit is as follows:
Direct material: 5 pounds at $8.00 per pound
Direct labor: 3 hours at $15 per hour
Variable overhead: 3 hours at $9 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Variable
Cost per
Unit Sold
Advertising
Sales salaries and commissions
Shipping expenses
Fixed Cost
per Month
$ 350,000
$ 400,000
$ 40.00
45.00
27.00
$112.00
The planning budget for March was based on producing and selling 21,000 units. However, during March the company
actually produced and sold 26,000 units and incurred the following costs:
Direct labor cost
$ 27.00
$18.00
a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production.
b. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour.
c. Total variable manufacturing overhead for the month was $655,200.
d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000,
respectively.
6. What direct labor cost would be included in the company's flexible budget for March?
Prev
67
S ∞o
8
***
15
of 15
HH
Next >
C
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