The following information applles to the quesuons displayed below) Preble Compan
ID: 2558861 • Letter: T
Question
The following information applles to the quesuons displayed below) Preble Company manufectures one product.Its vanable menufacturing overheed is applied to production based on direct labor-hours and ts standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound $40.00 Direct labor: 2 hours at $14 per hour Vartable overhead 2 hours at $5 per hour 28.00 10.00 Total standard variable cost per unit $78.00 The company also established the following cost formules for its selling expenses: Fixed Cost per Variable Monthper Unit Advertising $200,000 Sales salaries and commissions$ 100,000 $12.00 Shipping expenses $ 3.00 The planning budget for March was bosed on producing and selling 25,000 units. However, duning the company actually produced and sold 30,000 units and incurred the following costs a. Purchased 160.000 pounds of revw matenals at a cost of $7.50 per pound. All of this matenal wos used production. b. Direct-laborers worked 55.000 hours at a rate of $15.00 per hour c. Total variable manufacturing overheod for the month was $280.500. d. Total advertising, sales salaries and commssions, and shipping expenses were $210.000. $455,000, $115,000, respectively. up end "brt sc delete romeExplanation / Answer
13) Spending variance for advertising = 200000-210000 = 10000 U
14) Spending variance for sales salaries and commission = (30000*12+100000)-455000 = 5000 F
15) Spending variance for Shipping expense = (30000*3)-115000 = 25000 U
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