[The following information applies to the questions displayed below Preble Compa

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 material: 4 pounds at $10.00 per pound Direct labor: 2 hours at $15.00 per hour Variable overhead: 2 hours at $9.00 per hour 40.00 30.00 18.00 Total standard variable cost per unit $ 88.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month $240.000 Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $130.0001300 $ 3.00

Explanation / Answer

1 Rawmaterial Cost =29000*40 1160000 2 Material Quantity Varaince (SQ-AQ)*SR (29000*4-160000)*10 440000 Unfavorable 3 Material Price Variance Actual Qty *(SR-AR) 160000*(10-8.50) 240000 favorable 4 Material Quantity Varaince (SQ-AQ)*SR (29000*4-160000)*10 440000 Unfavorable

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