[The following information applies to the questions displayed below.]Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based ondirect labour-hours, and its standard costs per unit are as follows:Direct materials: 5 kg at $10.00 per kgDirect labour: 2 hours at $15 per hourVariable overhead: 2 hours at $5 per hourTotal standard cost per unitThe company planned to produce and sell 32,000 units in March. However, during March the company actuallyproduced 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 overheadrate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" forno effect (i.e., zero variance.).)Variable overhead rate variance$50.0030.0010.00$90.00< Prev78of 8 HBNext > Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based ondirect labour-hours, and its standard costs per unit are as follows:Direct materials: 5 kg at $10.00 per kgDirect labour: 2 hours at $15 per hourVariable overhead: 2 hours at $5 per hourTotal standard cost per unitThe company planned to produce and sell 32,000 units in March. However, during March the company actuallyproduced 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 theeffect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)Variable overhead efficiency variance2JAN 124$50.0030.0010.00$90.00< PrevstyS8 of 8Next >E?

The variation in the sum of overhead applied throughout the process of manufacturing as well as the…

Answered: Preble Company manufactures one…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.50 Direct labor $ 3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.50 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 9. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
JT Engineering's normal capacity is 20,000 direct labor hours. If JT's variable costs are $26,400 and its fixed costs are $14,900 when the company runs at normal capacity, what is its standard manufacturing overhead rate per unit? A. $2.07 B. $0.75 C. $1.32 D. $0.48
A company manufactures a product with three models, each with different direct material costs and labour hour required and monthly production volume as follows: Model A Model B Model C |Units of production Labour hour required | Direct material costs 1,700 1,200 0.6 1,100 0.3 0.7 30 40 50 Labor rate is $10 per hour. The total manufacturing overhead is estimated to be $103,000 per month. Required: a) The manufacturing overhead is allocated to the three models based on labor hour. Compute the pre-determined overhead rate and the unit product cost of Model A. b) The company is considering to use the activity-based costing and gathers the following data related to the cost and activities: Expected Activity Activity Cost Pool Overhead Costs Model A Model B Model C Activity 1 $30,000 1,000 600 400 Activity 2 General Factory $17,000 1,700 200 100 $56.000 510 660 230 Total $103.000 i. Compute the activity rate for each activity. ii. Compute the unit product costs of Model A and Model B.
artinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.50 Direct labor $ 4.00 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.)
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. 5. What is the labour rate 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.). Do not round intermediate calculations.) Labour rate variance
CO 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 Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour 00 ZT Total standard variable cost per unit 00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $10.00 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct-laborers worked 62,000 hours at a rate of $17.00 per hour. C. Total variable manufacturing overhead for the month was $390,600.…
Colonels uses a traditional cost system and estimates next year's overhead will be $651,000, with the estimated cost driver of 217,000 direct labor hours. It manufactures three products and estimates the following costs: Small Medium Large 31,000 10,000 3,000 $8 $8 6 11 Units Direct Material Cost Direct Labor Hours per Unit If the labor rate is $30 per hour, what is the per-unit cost of each product? Small Medium Cost per unit $4 4 Large
The Jaguar Company, which manufactures electrical switches, uses a standard costing system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below: Variable MOH (5 hours @ $12 per DMfgL hour) Fixed MOH (5 hours @ $15* per DMfgL hour) Total MOH per switch *Based on a capacity of 200,000 DMfgL hours per month The following information is available for the month of October: > 46,000 switches were produced, although 40,000 switches were scheduled to be produced. > 225,000 DMfgL hours were worked at a total cost of $5,625,000. Actual variable MOH costs were $2,750,000. Actual fixed MOH costs were $3,050,000. $ 60 75 $135 1. Compute the variable MOH spending, efficiency, and flexible-budget variances, and the allocated variable MOH costs.
Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Direct materials: Standard: 1.80 feet at $2.20 per foot Actual: 1.75 feet at $2.40 per foot Direct labor: Standard: 0.90 hour at $14.00 per hour Actual: 0.95 hour at $13.40 per hour Variable overhead: Standard: 0.90 hour at $5.00 per hour Actual: 0.95 hour at $4.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Required 1 Standard Cost per Unit $3.96 Required 2 12.60 Required 3 4.50 Complete this question by entering your answers in the tabs below. $ 21.06 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance The production superintendent was pleased when he saw this report and commented: "This $0.24 excess cost is well within the 5 percent limit management has set for…
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.50 Direct labor $ 4.00 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)
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: 8 pounds at $10.00 per pound Direct labor: 5 hours at $13 per hour Variable overhead: 5 hours at $8 per hour Total standard variable cost per unit $ 80.00 65.00 40.00 $ 185.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $ 290,000 $ 280,000 Variable Cost per Unit Sold $ 21.00 $ 12.00 The planning budget for March was based on producing and selling 15,000 units. However, during March the company actually produced and sold 17,000 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $8.00 per pound. All of this material was used in production. b. Direct-laborers worked 64,000 hours at a rate of $14.00 per hour. c. Total variable…
The normal production capacity of a company is 10,000 units per month. On this basis, the fixed costs are assigned, which, in unit terms, amount to:General and administrative expenses $25.00Selling expenses $5.00Unit variable costs are fully proportional to production and sales, and amount to:Direct Labor $18.00Materials $14.50Manufacturing overhead $8.00 The price of the product in the market is $90 and the commissions to the sellers correspond to 5% of the sales. The company is studying the possibility of closing for a time that could reach 2 years, due to a period of depression that is estimated to affect the industry in that period, a fact that would reduce its activity levels to 20% of its normal capacity. If it closes, fixed charges could be reduced by 30%, and if it continues to operate, the reduction would only reach 15%. What would be the differential savings of opting for the best alternative?

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