Unit 6 - Chapter 9 Assignment(ACCT211H) 1.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 $13 per hour26.00 Variable overhead: 2 hours at $9 per hour18.00 Total standard variable cost per unit$ 84.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per MonthVariable Cost per Unit Sold Advertising$ 240,000 Sales salaries and commissions $ 180,000$ 16.00 Shipping expenses$ 7.00 The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold34,000 units and incurred the following costs: Purchased160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. Direct-laborers worked 59,000 hours at a rate of $14.00 per hour. Total variable manufacturing overhead for the month was $564,040. Total advertising, sales salaries and commissions, and shipping expenses were $245,000, $475,000, and $155,000, respectively.1 What raw materials cost would be included in the company's flexible budget for March? Raw material cost $1,360,000 34000 x 40 =$1,360,000 2.What is the materials quantity variance for March? Materials quantity variance $240,000 U = ($10-8.50) *160,000 = $240,000 U 3.What is the materials price variance for March? Material price variance $240,000 F 4.If Preble had purchased 174,000 pounds of materials at $8.50 per pound and used 160,000 pounds in production, what would be the materials quantity variance for March? Materials quantity variance $240,000 U
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