Preble Company manufactures one product. Its variable manufacturing overhead is
ID: 2468041 • Letter: P
Question
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 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:
Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.
Total advertising, sales salaries and commissions, and shipping expenses were $352,000, $565,200, and $129,000, respectively.
What is the materials quantity 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 materials price 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.).)
If Preble had purchased 184,000 pounds of materials at $8 per pound and used 180,000 pounds in production, what would be the materials quantity 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.).)
If Preble had purchased 184,000 pounds of materials at $8.50 per pound and used 180,000 pounds in production, what would be the materials price 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 efficiency 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.).)
What variable manufacturing overhead cost would be included in the company’s flexible budget for March?
What is the variable overhead efficiency 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 variable overhead rate variance for March? (Do not round intermediate calculations.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 spending variance related to advertising? (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 spending variance related to sales salaries and commissions? (Input the amounts as positive values. 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 spending variance related to shipping expenses? (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.).)
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
Ans 1 Raw materialt in flexible budget actual units*Standard rate of material 34000*5*$9 1530000 Ans 2 Direct Material Price Variance=Actual Quantity x Actual Price - Actual Quantity x Standard Price (180000*8.5)-(180000*9) -90000 F Ans 3 Direct Material Usage Variance:(Actual Quantity - Standard Quantity) x Standard Price Standard cost for actaul qunatity-Standard Quantity*Standard Price (180000-(34000*5))*9 90000 U Ans 4 Direct Material Usage Variance:(Actual Quantity - Standard Quantity) x Standard Price Standard cost for actaul qunatity-Standard Quantity*Standard Price (180000-(34000*5))*9 90000 U For quantity variance we take the material used not purchased Ans 5 Direct Material Price Variance=Actual Quantity x Actual Price - Actual Quantity x Standard Price (184000*8.5)-(184000*9) -92000 F For price variance we take material purchased not used Ans 6 Direct labour Cost in flexible budget Actual units*Standard labour cost 34000*42 1428000 Ans 7 Direct Labor Effciency Variance: Standard Rate(Actual Hours-Standard H0urs) Standard rate for actula hours-Standard rate*Standard Hours 14*(90000-(34000*3)) -168000 F Ans 8 Direct Labor Rate Variance: Actual Cost-Standard Cost of Actual Hours 90000*(15-14) 90000 U Dear studend there are various sub parts I have answered first 8
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