Required information
[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: 5 pounds at $8.00 per pound | $ | 40.00 |
Direct labor: 2 hours at $14 per hour | 28.00 | |
Variable overhead: 2 hours at $5 per hour | 10.00 | |
Total standard variable cost per unit | $ | 78.00 |
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month | Variable Cost per Unit Sold | ||||||
Advertising | $ | 200,000 | |||||
Sales salaries and commissions | $ | 100,000 | $ | 12.00 | |||
Shipping expenses | $ | 3.00 | |||||
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:
Direct-laborers worked 55,000 hours at a rate of $15.00 per hour.
Total variable manufacturing overhead for the month was $280,500.
Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively.
6. What direct labor cost would be included in the company’s flexible budget for March?
7. What is the direct labor efficiency 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.)
8. What is the direct labor 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.)
6) Labor in flexible budget = 30000*28 = 840000
7) Labor efficiency variance = (30000*2-55000)*14 = 70000 F
8) Labor rate variance = (14-15)*55000 = 55000 U
Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product....
Required information [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: 5 pounds at $8.00 per pound $ 40.00 Direct labor: 2 hours at $14 per hour 28.00 Variable overhead: 2 hours at $5 per hour 10.00 Total standard variable cost per unit $ 78.00 The company also established the following...
Required information [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: 5 pounds at $8.00 per pound $ 40.00 Direct labor: 2 hours at $14 per hour 28.00 Variable overhead: 2 hours at $5 per hour 10.00 Total standard variable cost per unit $ 78.00 The company also established the following...
Required information [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: 5 pounds at $8.00 per pound $ 40.00 Direct labor: 3 hours at $15 per hour 45.00 Variable overhead: 3 hours at $9 per hour 27.00 Total standard variable cost per unit $ 112.00 The company also established the following...
Required Information 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: 5 pounds at $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit $ 50.00 64.00 20.00 $142.00 The company also established the following cost...
Required information /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: 5 pounds at $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit $ 50.00 64.00 28.00 $142.00 The company also established the following cost...
[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: 6 pounds at $8.00 per pound $ 48.00 Direct labor: 4 hours at $17 per hour 68.00 Variable overhead: 4 hours at $4 per hour 16.00 Total standard variable cost per unit $ 132.00 The company also established the following cost formulas...
Required information 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: $50.00 64.00 Direct material: 5 pounds at $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit $142.00 The company also established the following cost formulas for...
Required information [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 labdr-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 55 per hour Total standard cost per unit $40.00 28.se 10.90 $78.90 The planning budget for March was based on producing...
Required Information 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: 5 pounds at $10.00 per pound Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour Total standard variable cost per unit $50.00 64.00 20.00 $142.00 The company also established the following cost formulas...
[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: 6 pounds at $8.00 per pound $ 48.00 Direct labor: 4 hours at $17 per hour 68.00 Variable overhead: 4 hours at $4 per hour 16.00 Total standard variable cost per unit $ 132.00 The company also established the following cost formulas...