The planning budget for march was based on producing and

Reference no: EM13572713

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 per pound	$	45
Direct labor: 3 hours at $14 per hour		42
Variable overhead: 3 hours at $9 per hour		27

Total standard variable cost per unit	$	114

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

	Fixed Cost per Month		Variable Cost per Unit Sold
Advertising	$	300,000
Sales salaries and commissions	$	200,000	$	12.00
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 $7.2 per pound. All of this material was used in production.
b.	Direct-laborers worked 65,000 hours at a rate of $15 per hour.
c.	Total variable manufacturing overhead for the month was $612,000.
d.	Total advertising, sales salaries and commissions, and shipping expenses were $308,000, $480,000, and $106,000, respectively.

Required:

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

a.	Purchased 155,000 pounds of raw materials at a cost of $7.2 per pound. All of this material was used in production.
b.	Direct-laborers worked 65,000 hours at a rate of $15 per hour.
c.	Total variable manufacturing overhead for the month was $612,000.
d.	Total advertising, sales salaries and commissions, and shipping expenses were $308,000, $480,000, and $106,000, respectively.

Required:

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

Reference no: EM13572713

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