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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 materials: 5 pounds at $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $ 50 56 16 $ 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs:

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 materials: 5 pounds at $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $ 50 56 16 $ 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs:

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 20P: Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The...
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1. What raw materials cost would be included in the company’s planning budget for March?

2. What raw materials cost would be included in the company’s flexible budget for March?

3. What is the materials price 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 all amounts as positive values.)  

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 materials: 5 pounds at $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $50 56 16 $ 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct laborers worked 74,000 hours at a rate of $15 per hour. c. Total variable manufacturing overhead for the month was $440,300.
Transcribed Image Text: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 materials: 5 pounds at $10 per pound Direct labor: 4 hours at $14 per hour Variable overhead: 4 hours at $4 per hour Total standard cost per unit $50 56 16 $ 122 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,200 units and incurred the following costs: a. Purchased 180,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct laborers worked 74,000 hours at a rate of $15 per hour. c. Total variable manufacturing overhead for the month was $440,300.
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