The following information applies to the questions displayed below.] Preble Comp
ID: 2424913 • 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.
What is the direct labor rate variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
What is the direct labor rate variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
Total advertising, sales salaries and commissions, and shipping expenses were $337,000, $505,120, and $128,000, respectively.
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
Labor rate variance = AH (AR – SR)
= 82000 hours ($18.00 per hour – $17.00 per hour)
= $82,000 U
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