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 |
$ |
40.00 |
| Direct labor: 2 hours at $14.00 per hour |
|
28.00 |
| Variable overhead: 2 hours at $6.00 per hour |
|
12.00 |
| |
| Total standard variable cost per unit |
$ |
80.00 |
The company also established the following cost formulas for its selling expenses:
The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs:
| Fixed Cost per Month |
Variable Cost
per Unit Sold |
| Advertising |
$ |
270,000 |
|
|
|
|
| Sales salaries and commissions |
$ |
100,000 |
|
$ |
12.00 |
|
| Shipping expenses |
|
|
|
$ |
3.00 |
a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production.
b. Direct-laborers worked 62,000 hours at a rate of $15.00 per hour.
c. Total variable manufacturing overhead for the month was $390,600.
d. Total advertising, sales salaries and commissions, and shipping expenses were $279,000, $390,600, and $122,000, respectively.
1.What is the materials price variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).) Materials price variance_______?