5) e http://ezi m heducation.co nh tpu? :020175 p-G Edit View Favorites Took Hel

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5) e http://ezi m heducation.co nh tpu? :020175 p-G Edit View Favorites Took Help e Uni 6. Chapter S Ass nn. ? le Questlons 1 -15 (of 15 The tollowing nformation apples to the questions displayed below Preble Company manufactures one product.lts varlable manufactuiring overheed is epplied to production based on drect lebor-hours and its standard cost card per unit is as follows Direct matertal: 6 pounds at $9.00 per pound $ 54.00 Direct lebor:5 hours at $13.00 per hour Varlable averhead 5 hours at $3.00 per hour 65.00 5.00 Total standerd varlable cost per unit 134.00 The company also established the following cost formulas for ts selling expenses Fixed Cost per Varnable Cost Monthper Unt Sold $260,000 S 120,000 Sales salortes and commissions Shipping expenses $ 11.00 $ 4.00 The planning budget for March wes based on producing and seling 20,000 units. However, during March he company actually produced and soid 25,000 units and incurred the following costs Purchased 180,000 pounds of raw materials at a cost of $7.50 per pound All of this matenial was used in b. Direct-laborers worked 115,000 hours at a rete of $14.00 per hour C. Total variable manufacturing overheed for the month was $350.250 d. Total advernsing, sales salaries and commissions, and shipping expenses were $267,000, $350,750,and $105,000, respectively 10.00 points Required: 1. What raw materials cost would be included in the company's flexible budget for March? Raw material cost

Explanation / Answer

1 Raw materials cost=25000*54= $1350000 2 Materials quantity variance=9*(180000-25000*6)= $270000 U 3 Materials price variance=180000*(7.5-9)= $270000 F

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