Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its…

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its…

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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 $8.00 per pound
Direct labor: 2 hours at $16 per hour
Variable overhead: 2 hours at $6 per hour
Total standard variable cost per unit
The company also established the following cost formulas for its selling expenses:
Variable
Cost per
Unit Sold
Advertising
Sales salaries and commissions
Shipping expenses
Fixed Cost
per Month
$ 320,000
$ 340,000
$ 32.00
32.00
12.00
$.76.00
$ 24.00
$15.00
The planning budget for March was based on producing and selling 32,000 units. However, during March the company
actually produced and sold 37,000 units and incurred the following costs:
a. Purchased 160,000 pounds of raw materials at a cost of $7.40 per pound. All of this material was used in production.
b. Direct-laborers worked 67,000 hours at a rate of $17.00 per hour.
c. Total variable manufacturing overhead for the month was $422,100.
d. Total advertising, sales salaries and commissions, and shipping expenses were $329,000, $515,000, and $235,000,
respectively. 2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting “F” for favorable, “U” for
unfavorable, and “None” for no effect (i.e., zero variance.). Input the amount as a positive value.)
Materials quantity variance 6. What direct labor cost would be included in the company’s flexible budget for March?
Direct labor cost 9. What variable manufacturing overhead cost would be included in the company’s flexible budget for March?
Variable manufacturing overhead cost 10. What is the variable overhead efficiency variance for March? (Indicate the effect of each variance by selecting “F” for favorable.
“U” for unfavorable, and “None” for no effect (.e., zero variance.). Input the amount as a positive value.)
Vanable overhead efficiency variance 11. What is the variable overhead rate variance for March? (Indicate the effect of each variance by selecting “F” for favorable, “U” for
unfavorable, and “None” for no effect (i.e., zero variance.). Input the amount as a positive value.)
Variable overhead rate variance 14. What is the spending variance related to sales salaries and commissions? (Indicate the effect of each variance by selecting “F” for
favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance.). Input the amount as a positive value.)
Spending variance related to sales salaries and commissions 15. What is the spending variance related to shipping expenses? (indicate the effect of each variance by selecting “F” for favorable,
“U” for unfavorable, and “None” for no effect (i.e.. zero variance.). Input the amount as a positive value.)
Spending variance related to shipping expenses

Expert Answer:

Answer rating: 100% (QA)

To calculate the variances and answer the questions we need to compare the actual costs with the standard costs based on the given information Let s c
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