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 $11 per pound $ 55 Direct labor: 3 hours at $12 per hour 36 Variable overhead: 3 hours at $7 per hour 21 Total standard cost per unit $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 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 $11 per pound $ 55 Direct labor: 3 hours at $12 per hour 36 Variable overhead: 3 hours at $7 per hour 21 Total standard cost per unit $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs:
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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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its
Direct materials: 5 pounds at $11 per pound | $ 55 |
---|---|
Direct labor: 3 hours at $12 per hour | 36 |
Variable overhead: 3 hours at $7 per hour | 21 |
Total standard cost per unit | $ 112 |
The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs:
- Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production.
- Direct laborers worked 63,000 hours at a rate of $13 per hour.
- Total variable manufacturing overhead for the month was $510,930.
required:
14. What is the variable overhead rate variance for March?
13. What variable
12. What variable manufacturing overhead cost would be included in the company’s planning budget for March?
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