M ch 10 Homework | ezto.mheducation.com/hm.tpx?-=0.7478902744723268-146399372333

Question

M ch 10 Homework | ezto.mheducation.com/hm.tpx?-=0.7478902744723268-1463993723334 [The following information applies to the questions displayed below.j 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 Direct materials: 8 pounds at $10 per pound Direct labor: 5 hours at $13 per hour Variable overhead: 5 hours at $8 per hour $ 80 65 40 Total standard cost per unit $ 185 The planning budget for March was based on producing and selling 15,000 units. However, during March the company actually produced and sold 17,000 units and incurred the following costs a. Purchased 170,000 pounds of raw materials at a cost of $8.00 per pound. All of this material was used in production b. Direct laborers worked 64,000 hours at a rate of $14 per hour c. Total variable manufacturing overhead for the month was $513,920 0 1:55 AM 5/23/2016 Search the web and Windows

Explanation / Answer

Actual hours=64,000
actual variable rate(AVR)=513920/640000=8.03
std variable rate(svr)=8 per hour
Standard hours=17000*5=85,000

variable overhead rate variance=(AH*AVR)-(AH*SVR)
=64000*(8.03-8)=$1920 it is unfavourrable

Variable over head efficency=SVR*(AH-SH)
8*(64000-85000)
=166,000 it is favourable

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