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

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 Direct materials: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour $40.00 28.00 1000 Total standard cost per unit $78.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production b. Direct laborers worked 55,000 hours at a rate of $15.00 per hour. c. Total variable manufacturing overhead for the month was $280,500. 1. value: .00 points 1. What raw materials cost would be included in the company's planning budget for March? Raw material cost

Explanation / Answer

As question with multiple sub-parts has been asked, only first 4 can be answered at a time 1 Raw materials cost = 25000*40= 1000000 2 Raw materials cost = 30000*40= 1200000 3 Materials price variance = 160000*(7.5-8)= 80000 F 4 Materials quantity variance = 8*(160000-30000*5)= 80000 U

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