The following information applies to the questions displeyed below] Preble Compa
ID: 2558788 • Letter: T
Question
The following information applies to the questions displeyed below] Preble Company manufactures one product. Its varlable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows Direct matertal: 5 pounds at $8.00 per pound$40.00 Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour 28.00 10.00 Total standard varnable cost per unit $78.00 The company also established the following cost formules for its selling expenses. Cost per Variable Month $200,000 Advertising Sales salaries and commissions Shipping expenses 100,000 $12.00 $ 3.00 25,000 units However, during March The planning budget for March was based on producing and selling the company actually produced and sold 30,000 units and Incurred the following costs Gcaucsen o b worked s5.o00 hours at a fate of $1500 per hour. c Total variable manufacturting oyerheed for the month was $280.500 d. Total advertising, sales salories and commissions, and shipping expenses were $210,000. $455,000, ond offraw materials at a cost of materials at a cost of $7.50 per pound. All of this material was used in a Purchased 160.000 $115,000, respectively. CI O Type here to search 4 5 6 7 3Explanation / Answer
1) Raw material in flexible budget = 30000*40 = 1200000
2) Material quantity variance = (30000*5-160000)*8 = 80000 U
3) Material price variane = (8-7.50)*160000 = 80000 F
4) Material quantity variance = (30000*5-160000)*8 = 80000 U
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.