Preble Company manufactures one product. It's variable manufacturing overhead is applied to production based on direct labor-hour and its standard cost per unit is as follows:
Direct material: 4 pounds at $8.00 per pound $32.00
Direct labor: 2 hours at $12.00 per hour $24.00
Variable overhead: 2 hours at $6.00 per hour $12.00
Total standard variable cost per unit $68.00
The company also established the following cost formulas for its selling expenses:
Fixed cost per. Variable cost
month per unit sold
advertising $320,000
sales salaries $120,000. $10.00
shipping exp. $3.00
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 66,000 hours at a rate of 13,00 per hour.
c. Total variable manufacturing overhead for the month was $405,000.
d. Total advertising sales salaries and commissions and shipping expenses were $321,000, $405,240, and $127,000, respectively.
required:
1. what raw materials cost would be included in the company's flexible budget for March?
2. What is the materials quantity variance for March? (Favorable or Unfavorable)
3. What is the materials price variance for March? (Favorable or Unfavorable L
4. If Preble had purchased 182,000 pounds of materials at $7 per pound and used 160,000 pounds in production, what would be the materials quantity vibrance for March?
5. If Preble had purchased 182,000 pounds of materials at $7.40 pound and used 160,000 pounds in production what would be the materials price variance for March?
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?
8. what is the direct labor rate variance for March?
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?
11. What is the variable overhead rate variance for March?
12. What amounts of advertising, sales, salaries and commissions, and shipping expenses would be included in the company's flexible budget for March?
13. What is the spending variance related to advertising?
14. What is the spending variance related to sales and commissions?
15. What is the spending variance related to shipping expenses?