Preble Company manufactures one product. Its variable manufacturing overhead is applied to productic direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit $50.00 30.00 10.00 $90.00 The company planned to produce and sell 32,000 units in March. However, during March the company produced and sold 37600 units and incurred the following costs:

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on
direct labour-hours, and its standard costs per unit are as follows:
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
7. What is the variable overhead spending variance for March? (Do not round intermediate calculations. Round the actual overhead
rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for
no effect (i.e., zero variance.).)
Variable overhead rate variance
$50.00
30.00
10.00
$90.00
< Prev
7
8
of 8 HB
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Transcribed Image Text:[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 7. What is the variable overhead spending variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).) Variable overhead rate variance $50.00 30.00 10.00 $90.00 < Prev 7 8 of 8 HB Next >
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on
direct labour-hours, and its standard costs per unit are as follows:
Direct materials: 5 kg at $10.00 per kg
Direct labour: 2 hours at $15 per hour
Variable overhead: 2 hours at $5 per hour
Total standard cost per unit
The company planned to produce and sell 32,000 units in March. However, during March the company actually
produced and sold 37,600 units and incurred the following costs:
a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production.
b. Direct labour: 75,000 hours at a rate of $16 per hour.
c. Total variable manufacturing overhead for the month was $558,750.
8. What is the variable overhead efficiency variance for March? (Round the actual overhead rate to two decimal places. Indicate the
effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
Variable overhead efficiency variance
2
JAN 1
24
$50.00
30.00
10.00
$90.00
< Prev
sty
S
8 of 8
Next >
E
?
Transcribed Image Text:Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 8. What is the variable overhead efficiency variance for March? (Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).) Variable overhead efficiency variance 2 JAN 1 24 $50.00 30.00 10.00 $90.00 < Prev sty S 8 of 8 Next > E ?
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