Preble Company manufactures one product. Its variable manufacturing overhead is

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 33,000 units and incurred the following costs:

Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.

Total advertising, sales salaries and commissions, and shipping expenses were $233,000, $729,060, and $144,000, respectively.

1. What raw materials cost would be included in the company’s flexible budget for March? Raw Material Cost_______

2. 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.).) Materials quantity varance _______

3. 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.).) Materials price variance ________

4. If Preble had purchased 173,000 pounds of materials at $7 per pound and used 165,000 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.).) Materials quantity variance ___________

5. If Preble had purchased 173,000 pounds of materials at $7.20 per pound and used 165,000 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.).) Materials price variance ________

THANK YOU SO MUCH FOR YOUR SUPPORT!!!

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

1) Raw materials included in flexible budget 33,000*36 1188000 2) Material Qty variance (actual qty used - std qty allowed)*standard rate (165000 - 33000*4)*9 297000 U 3) Material price variance (actual price - standard price)*actual qty purchased (7.20 - 9)*165000 297000 F 4) Material Qty variance (actual qty used - std qty allowed)*standard rate (165000 - 33000*4)*9 297000 U 5) Material price variance (actual price - standard price)*actual qty purchased (7.20 - 9)*173000 311400 F

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