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Preble Company_Standard costing

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Question;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 lbs. @ 8.00 per pound-$40;Direct Labor: 2 hours @ 14 per hour-$28;Variable Overhead: 2 hours @ 5 per hour-$10;Total Standard Variable cost per Unit- $78;The company also established the following;cost formulas for its selling expenses;Row 1 Fixed;Row 2 Variable;Advertising $200,000;Sales Salaries & Commission $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 cost;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 per hour.;C.;Total variable manufacturing;overhead for the month was $280,500.;D.;Total advertising, salaries;commissions and shipping expenses were $210,000 $455,000 and $115,000;respectively.;1.;What raw materials cost would;be included in the company?s flexible budget;for March?;2.;What is the raw materials;quantity variance for March?;3.;What is the materials price;variance for March?;4.;If Preble had purchased 170,000;pounds of materials at 7.50 per pound and used 160,000 pounds in production;what would be the materials quantity variance for March? Indicate the effect of;the variance as favorable, unfavorable or none.;5.;Same as question #4 but the;materials price variance. Indicate the effect.;6.;What 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 as Favorable, Unfavorable;or None.;8.;What is the direct labor rate;variance for March? Indicate the Effect.;9.;What variable manufacturing;overhead cost would be included in the company?s flexible budget for March?;10.;What is the variable overhead;efficiency variance for March? Indicate the Effect.;11.;What is the variable overhead;rate variance for March? Indicate the Effect;12.;What amounts of advertising;sales salaries and commissions and shipping expenses would be included in the;company?s flexible budget for March? (Units Sold 30,000);13.;What is the spending variance;related to advertising? Indicate the effect.;14.;What is the spending variance;related to sales salaries and commissions? Indicate the Effect.;15.;What is the spending variance;related to shipping expenses? Indicate the Effect

 

Paper#37351 | Written in 18-Jul-2015

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