[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 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 $ 40.00 45.00 27.00 $112.00 Fixed Cost per Month $ 350,000 $ 400,000 $ 27.00 $18.00 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: 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. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour. Variable overhead efficiency variance c. Total variable manufacturing overhead for the month was $655,200. d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000, respectively. 10. What is the variable overhead efficiency 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.). Input the amount as a positive value.)
[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 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 $ 40.00 45.00 27.00 $112.00 Fixed Cost per Month $ 350,000 $ 400,000 $ 27.00 $18.00 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: 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. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour. Variable overhead efficiency variance c. Total variable manufacturing overhead for the month was $655,200. d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000, respectively. 10. What is the variable overhead efficiency 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.). Input the amount as a positive value.)
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...
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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
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
$ 40.00
45.00
27.00
$112.00
Fixed Cost
per Month
$ 350,000
$ 400,000
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:
$ 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. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour.
Variable overhead efficiency variance
c. Total variable manufacturing overhead for the month was $655,200.
d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000,
respectively.
< Prev
10. What is the variable overhead efficiency 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.). Input the amount as a positive value.)
S
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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
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
$ 40.00
45.00
27.00
$112.00
Fixed Cost
per Month
$ 350,000
$ 400,000
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:
$ 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. Direct-laborers worked 70,000 hours at a rate of $16.00 per hour.
Variable overhead efficiency variance
c. Total variable manufacturing overhead for the month was $655,200.
d. Total advertising, sales salaries and commissions, and shipping expenses were $358,000, $530,000, and $265,000,
respectively.
< Prev
10. What is the variable overhead efficiency 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.). Input the amount as a positive value.)
S
10 11 12
15
of 15
Next >
Che
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