The following information applies to the questions displayed below.] Preble Comp
ID: 2424899 • Letter: T
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 labor-hours and its standard cost card per unit is as follows:
The company also established the following cost formulas for its selling expenses:
The planning budget for March was based on producing and selling 24,000 units. However, during March the company actually produced and sold 30,600 units and incurred the following costs:
Purchased 170,000 pounds of raw materials at a cost of $9.00 per pound. All of this material was used in production.
Total advertising, sales salaries and commissions, and shipping expenses were $337,000, $505,120, and $128,000, respectively.
1.
value:
10.00 points
Required information
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:
Explanation / Answer
The raw material costs that would be included in the companies flexible budget for the month of March = actual Production * Budgeted Price = 30600 units* 5 pounds per unit * 10 per pound = $ 1530000
Material Qty varience for March = Direct material Qty Varience = Budgeted Qty - Actual Qty = (30600*5)- 170000 = 17000 Units or $ 17000* 10 = $ 170000.
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