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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
$
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:
a.
Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production.
b.
Direct-laborers worked 55,000 hours at a rate of $15.00 per hour.
c.
Total variable manufacturing overhead for the month was $280,500.
d.
Total advertising, sales salaries and commissions, and shipping expenses were $210,000, $455,000, and $115,000, respectively.
Required:
9. What variable manufacturing overhead cost would be included in the company?s flexible budget for March?
Variable manufacturing overhead cost
10. What is the variable overhead efficiency variance for March? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. 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
11. What is the variable overhead rate variance for March? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. 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
12. What amounts of advertising, sales salaries and commissions, and shipping expenses would be included in the company?s flexible budget for March?
Preble Company Flexible Budget For the Month Ended March 31
Units sold (q)
30,000
Expenses:
13. What is the spending variance related to advertising? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
Spending variance $
14. What is the spending variance related to sales salaries and commissions? (Input the amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
15. What is the spending variance related to shipping expenses? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)
question 1. which statement is false?a. stock basis may not go below zerob. aaa may not go below zeroc.losses are
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