[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 materials: 5 pounds at $7 per pound Direct labor: 3 hours at $16 per hour Variable overhead: 3 hours at $4 per hour Total standard cost per unit $95 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: $ 35 48 12 Purchased 175,000 pounds of raw materials at a cost of $6.80 per pound. All of this material was used in production. Direct laborers worked 71,000 hours at a rate of $17 per hour. Total variable manufacturing overhead for the month was $340,090. Foundational 10-2 (Algo) 2. What raw materials cost would be included in the company's flexible budget for March?

[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 materials: 5 pounds at $7 per pound Direct labor: 3 hours at $16 per hour Variable overhead: 3 hours at $4 per hour Total standard cost per unit $95 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: $ 35 48 12 Purchased 175,000 pounds of raw materials at a cost of $6.80 per pound. All of this material was used in production. Direct laborers worked 71,000 hours at a rate of $17 per hour. Total variable manufacturing overhead for the month was $340,090. Foundational 10-2 (Algo) 2. What raw materials cost would be included in the company's flexible budget for March?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The factory overhead is applied on the basis of direct labor hours. A condensed version of the company’s flexible budget follows: The product requires 3 lb of materials at a standard cost of $5 per pound and 2 hours of direct labor at a standard cost of $10 per hour. For the current year, the company planned to operate at the level of 6,250 direct labor hours and to produce 3,125 units of product. Actual production and costs for the year follow: Required: For the current year, compute the factory overhead rate that will be used for production. Show the variable and fixed components that make up the total predetermined rate to be used. Prepare a standard cost card for the product. Show the individual elements of the overhead rate as well as the total rate. Compute (a) standard hours allowed for production and (b) under- or overapplied factory overhead for the year. Determine the reason for any under- or overapplied factory overhead for the year by computing all variances, using each of the following methods: Two-variance method Three-variance method (appendix) Four-variance method (appendix)
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