Reference no: EM132556828

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 $9.00 per pound$45.00

Direct labor: 3 hours at $18.00 per hour 54.00

Variable overhead: 3 hours at $9.00 per hour 27.00

Total standard variable cost per unit$126.00

The company also established the following cost formulas for its selling expenses:

Fixed Cost per MonthVariable Cost per Unit Sold

Advertising $300,000

Sales salaries and commissions $220,000 $16.00

Shipping expenses $4.00

The planning budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 24,800 units and incurred the following costs:

a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.

b. Direct-laborers worked 68,000 hours at a rate of $19.00 per hour.

c. Total variable manufacturing overhead for the month was $615,000.

d. Total advertising, sales salaries and commissions, and shipping expenses were $308,000, $614,720, and $106,000, respectively.

Question 1: What direct labor cost would be included in the company's flexible budget for March?

Question 2: What is the direct labor efficiency variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

Question 3: What is the direct labor rate variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)

Question 4: What variable manufacturing overhead cost would be included in the company's flexible budget for March?

Question 5: What is the variable overhead efficiency variance for March? (Input the amount as a positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).)