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:
2. What is the spending variance related to advertising? (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.)
3. 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.)
4. 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.)
Budgetted, actual and variance for the month of March | ||||||
Budgetted | Actual | Variance | ||||
for 25,000 units | for 30,000 units | for 30,000 units | ||||
$ | $ | $ | $ | $ | $ | |
Fixed | Variable (Per unit) | |||||
Direct Material | 40 | 1,000,000 | 1,200,000 | 1,200,000 | ||
Direct Labour | 28 | 700,000 | 840,000 | 825,000 | ||
Variable Overheads | 10 | 250,000 | 300,000 | 280,500 | ||
Advertising | 200,000 | 200,000 | 200,000 | 210,000 | 10,000(U) | |
Sales Salaries and Commissions | 100,000 | 12 | 400,000 | 460,000 | 455,000 | 5,000(F) |
Shipping Expenses | 3 | 75,000 | 90,000 | 115,000 | 25,000(U) |
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct...
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: 8 pounds at $10.00 per pound $80.00 Direct labor: 5 hours at $13 per hour 65.00 Variable overhead: 5 hours at $8 per hour 40.00 Total standard variable cost per unit $ 185.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost...
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 $ 50.00 Direct labor: 4 hours at $16 per hour 64.00 Variable overhead: 4 hours at $7 per hour 28.00 Total standard variable cost per unit $142.00 The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Fixed...
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 $9.00 per pound $36.00 Direct labor: 3 hours at $12 per hour Variable overhead: 3 hours at $8 per hour Total standard variable cost per unit 36.00 24.00 $96.00 The company also established the following cost formulas for its selling expenses Variable Cost per Unit Sold Fixed Cost...
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...
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...
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: 3 hours at $17.00 per hour Variable overhead: 3 hours at $6.00 per hour $ 50.00 51.00 18.00 Total standard variable cost per unit $ 119,00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions...
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 $ 50.00 Direct labor: 4 hours at $16 per hour Variable overhead: 4 hours at $7 per hour 64.00 28.00 Total standard variable cost per unit $142.00 The company also established the following cost formulas for its selling expenses: Variable Fixed Cost Cost per per...
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...
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 Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit $40.ee 28.ee le.ee The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Soll Fixed Cost per...
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...