Preble Company manufactures one product. Its variable manufacturing
Direct material: 4 pounds at $9.00 per pound | $ 36.00 |
---|---|
Direct labor: 3 hours at $12 per hour | 36.00 |
Variable overhead: 3 hours at $8 per hour | 24.00 |
Total standard variable cost per unit | $ 96.00 |
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month | Variable Cost per Unit Sold | |
---|---|---|
Advertising | $ 230,000 | |
Sales salaries and commissions | $ 160,000 | $ 15.00 |
Shipping expenses | $ 6.00 |
The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs:
- Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
-
Direct-laborers worked 58,000 hours at a rate of $13.00 per hour.
-
Total variable manufacturing overhead for the month was $729,060.
-
Total advertising, sales salaries and commissions, and shipping expenses were $240,000, $470,000, and $145,000, respectively.
What is the direct labor efficiency variance for March?
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
- Required information [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 labor-hours and its standard cost card per unit is as follows: Direct material: 4 pounds at $9.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $6 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses $ 36.00 45.00 18.00 $ 99.00 Fixed Cost per Month $ 210,000 $ 120,000 Variable Cost per Unit Sold $ 13.00 $ 4.00 The planning budget for March was based on producing and selling 26,000 units. However, during March the company actually produced and sold 31,000 units and incurred the following costs: Variable overhead rate variance a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this…arrow_forward[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 labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $ 350,000 $ 400,000 $ 40.00 45.00 27.00 $112.00 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: Direct labor cost $ 27.00 $18.00 a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b.…arrow_forwardPlease provide answer in text (Without image)arrow_forward
- 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: $40.00 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 12.00 Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost, per Unit Sold Fixed Cost per Month $ 270,000 $ 240,000 Advertising $19.00 Shipping expenses 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 $1700 per hour c. Total variable manufacturing overhead for the month was $390,600. d. Total…arrow_forwardPreble 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: $40.00 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 Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Month per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 240,000 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.…arrow_forwardPreble 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: 5 pounds at $8.00 per pound $ 40.00 Direct labor: 2 hours at $14 per hour 28.00 Variable overhead: 2 hours at $5 per hour 10.00 Total standard variable cost per unit $ 78.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 200,000 Sales salaries and commissions $ 100,000 $ 12.00 Shipping expenses $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. Direct-laborers worked 55,000 hours at a rate of…arrow_forward
- T4.arrow_forward一 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 Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold, Fixed Cost per Month $ 270,000 Advertising, Sales salaries and commissions Shipping expenses $19.00 0000 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…arrow_forwardPreble 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: 5 pounds at $10.00 per pound $ 50.00 Direct labor: 3 hours at $17 per hour 51.00 Variable overhead: 3 hours at $7 per hour 21.00 Total standard variable cost per unit $ 122.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 330,000 Sales salaries and commissions $ 360,000 $ 25.00 Shipping expenses $ 16.00 The planning budget for March was based on producing and selling 24,000 units. However, during March the company actually produced and sold 30,600 units and incurred the following costs: Purchased 170,000 pounds of raw materials at a cost of $9.00 per pound. All of this material was used in production. Direct-laborers worked 68,000 hours at a rate of…arrow_forward
- [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 labor-hours and its standard cost card per unit is as follows: Direct material: 4 pounds at $9.00 per pound $ 36.00 Direct labor: 3 hours at $12 per hour 36.00 Variable overhead: 3 hours at $8 per hour 24.00 Total standard variable cost per unit $ 96.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 230,000 Sales salaries and commissions $ 160,000 $ 15.00 Shipping expenses $ 6.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs: Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was…arrow_forwardA company makes two products—Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Product A 0.75 20,000 units Product B 0.50 50,000 units Additional information is as follows: Product A requires $40 in direct materials per unit, and Product B requires $32. The direct labor wage rate is $18 per hour. The company’s activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Estimated Overhead Cost Expected Activity Product A Product B Total Machine setups (number of setups) $ 100,000 100 300 400 Special processing (machine-hours) $ 200,000 2,000 6,000 8,000 General factory (Direct labor-hours) $ 150,000 15,000 25,000 40,000arrow_forwardGodoarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education