Required information The Foundational 15 [LO10-1, LO10-2, LO10-3] The following

Question

Required information The Foundational 15 [LO10-1, LO10-2, LO10-3] 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: Direct materials: 5 pounds at ?10 per pound50 Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard cost per unit 64 $142 The planning budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 24,600 units and incurred the following costs: a. Purchased 164,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct laborers worked 57,000 hours at a rate of $17 per hour. c. Total variable manufacturing overhead for the month was $653,220.

Explanation / Answer

1) Raw material in planning budget = 20000*50 = 1000000

2) Raw material in flexible budget = 24600*50 = 1230000

3) Material price variance = (10-7.50)*164000 = 410000 F

4) Material quantity variance = (24600*5-164000)*10 = 410000 U

5) Material price variance = (10-7.50)*172000 = 430000 F

6) Material quantity variance = (24600*5-164000)*10 = 410000 U

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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