[The following information applies to the questions displayed below.] Preble Com

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 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs:

Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production.

Total advertising, sales salaries and commissions, and shipping expenses were $364,000, $655,520, and $130,000, respectively.

What raw materials cost would be included in the company’s flexible budget for March? Raw Materials cost?

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 quanity 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.).) Materials price variance?

If Preble had purchased 185,000 pounds of materials at $6 per pound and used 160,000 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.).) Marterals Quanity variance?

[The following information applies to the questions displayed below.]

Explanation / Answer

Req 1: Std qty allowed per unit: 5 pounds Std price per pound: $ 8.00 per pound Actual output: 26000 Units Std quantity allowed (26000*5): 130000 pounds Std material cost for flexible budget: Std quantity allowed: 130,000 Std price per pounds 8 Std material cost for flexible budget: 1040000 Req 2. Actual quantity used: 160000 pounds Actual price per pound: 650 per pound Material Quantity variance: Std price (Std quantity allowed-Actual Qty) 8.00 (130000 -160000): $ 240000 Unfav Req 3: Actual quantity used: 160000 pounds Actual price per pound: 650 per pound Material Price Variance: Actual Quantity (Std price -Actual price) 160000 (8.00-6.50) = $ 240000 Fav Req 4. Actual Quantity used: 160000 pounds Actual price per pound: $ 6.00 per pound Material Quantity variance: Std price (Std quantity allowed-Actual Qty) 8.00 (130000 -160000): $ 240000 Unfav It will remain same as the actual quantity used is same.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.