Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct...
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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: 3 hours at $15 per hour 45.00 27.00 Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit $112.00 The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Unit Sold per Month Advertising $ 350,000 Sales salaries and commissions $ 400,000 $27.00 $18.00 Shipping expenses 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. 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. What is the spending variance related to shipping expenses? 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: 3 hours at $15 per hour 45.00 27.00 Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit $112.00 The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Unit Sold per Month Advertising $ 350,000 Sales salaries and commissions $ 400,000 $27.00 $18.00 Shipping expenses 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. 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. What is the spending variance related to shipping expenses?
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Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
Posted Date:
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