**Budget Analysis for March Production**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 $7.50 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.**Question:** What is the materials quantity 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). Input the amount as a positive value.)**Materials Quantity Variance:**[Input Box for Amount] [Dropdown Box for F/U/None] 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 = $50.00- **Direct labor**: 4 hours at $16 per hour = $64.00- **Variable overhead**: 4 hours at $7 per hour = $28.00- **Total standard variable cost per unit** = $142.00The company also established the following cost formulas for its selling expenses:| Expense | Fixed Cost per Month | Variable Cost per Unit Sold ||-----------------------------|----------------------|-----------------------------|| Advertising | $220,000 | || Sales salaries and commissions | $140,000 | $14.00 || Shipping expenses | | $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 $7.50 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.

The materials quantity variance by multiplying the standard cost by the difference between the…

Answered: The planning budget for March was based…

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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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 materials: 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 cost per unit $ 78.00 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: Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. Direct laborers worked 55,000 hours at a rate of $15.00 per hour. Total variable manufacturing overhead for the month was $280,500. 7. What direct labor cost would be included in the company’s planning budget for March?
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 materials: 5 pounds at $11 per pound $ 55 Direct labor: 3 hours at $12 per hour 36 Variable overhead: 3 hours at $7 per hour 21 Total standard cost per unit $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs: Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. Direct laborers worked 63,000 hours at a rate of $13 per hour. Total variable manufacturing overhead for the month was $510,930. Questions: A) 3. What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no…
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