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and its standard cost card per unit is as follows: Direct material: 6 pounds at $8 per pound Direct labour: 4 hours at $13 per hour Variable overhead: 4 hours at $5 per hour Total standard variable cost per unit $ 48 52 20 $120 Fixed overhead was budgeted at $621,000. Fixed overhead is applied on the basis of direct labour-hours. The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per per Month $380,000 $280,000 Unit Sold Advertising Sales salaries and commissions Shipping expenses $11.00 $ 5.00 The static (i.e., planning) budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 25,500 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $7.2 per pound. All of this material was used in production. . Direct-labourers worked 73,000 hours at a rate of $14 per hour. Total variable manufacturing overhead for the month was $427000. And fixed manufacturing overhead was $616,000. -Total advertising, sales salaries and commissions, and shipping expenses were $389,000, $550,000, and $133,000, respectively. equired: hat raw materials cost would be included in the company's flexible budget for March? aw material cost

and its standard cost card per unit is as follows: Direct material: 6 pounds at $8 per pound Direct labour: 4 hours at $13 per hour Variable overhead: 4 hours at $5 per hour Total standard variable cost per unit $ 48 52 20 $120 Fixed overhead was budgeted at $621,000. Fixed overhead is applied on the basis of direct labour-hours. The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per per Month $380,000 $280,000 Unit Sold Advertising Sales salaries and commissions Shipping expenses $11.00 $ 5.00 The static (i.e., planning) budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 25,500 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $7.2 per pound. All of this material was used in production. . Direct-labourers worked 73,000 hours at a rate of $14 per hour. Total variable manufacturing overhead for the month was $427000. And fixed manufacturing overhead was $616,000. -Total advertising, sales salaries and commissions, and shipping expenses were $389,000, $550,000, and $133,000, respectively. equired: hat raw materials cost would be included in the company's flexible budget for March? aw material cost

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 20P: Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The...
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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours and its standard cost card per unit is as follows: Direct material: 6 pounds at $8 per pound Direct labour: 4 hours at $13 per hour Variable overhead: 4 hours at $5 per hour $ 48 52 20 Total standard variable cost per unit $120 Fixed overhead was budgeted at $621,000. Fixed overhead is applied on the basis of direct labour-hours. The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses per Month $380,000 $280,000 $11.00 $ 5.00 The static (i.e., planning) budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 25,500 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $7.2 per b. Direct-labourers worked 73,000 hours at a rate of $14 per hour. c. Total variable manufacturing overhead for the month was $427,000. And fixed manufacturing overhead was $616.000. d. Total advertising, sales salaries and commissions, and shipping expenses were $389,000, $550,000, and $133,000, respectively. All of this material was used in production. Required: What raw materials cost would be included in the company's flexible budget for March? Raw material cost
Transcribed Image Text:Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours and its standard cost card per unit is as follows: Direct material: 6 pounds at $8 per pound Direct labour: 4 hours at $13 per hour Variable overhead: 4 hours at $5 per hour $ 48 52 20 Total standard variable cost per unit $120 Fixed overhead was budgeted at $621,000. Fixed overhead is applied on the basis of direct labour-hours. The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses per Month $380,000 $280,000 $11.00 $ 5.00 The static (i.e., planning) budget for March was based on producing and selling 20,000 units. However, during March the company actually produced and sold 25,500 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $7.2 per b. Direct-labourers worked 73,000 hours at a rate of $14 per hour. c. Total variable manufacturing overhead for the month was $427,000. And fixed manufacturing overhead was $616.000. d. Total advertising, sales salaries and commissions, and shipping expenses were $389,000, $550,000, and $133,000, respectively. All of this material was used in production. Required: What raw materials cost would be included in the company's flexible budget for March? Raw material cost
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