Reference no: EM132998912
Question - 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: 6 pounds at $8.00 per pound$48.00
Direct labor: 4 hours at $17 per hour 68.00
Variable overhead: 4 hours at $4 per hour 16.00
Total standard variable cost per unit $132.00
The company also established the following cost formulas for its selling expenses:
Fixed Cost per Month Variable Cost per Unit Sold Advertising $370,000 Sales salaries and commissions $440,000 $29.00 Shipping expenses $20.00
The planning budget for March was based on producing and selling 19,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs:
-Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.
-Direct-laborers worked 72,000 hours at a rate of $18.00 per hour.
-Total variable manufacturing overhead for the month was $336,960.
-Total advertising, sales salaries and commissions, and shipping expenses were $374,000, $540,000, and $285,000, respectively.
Required - What raw materials cost would be included in the company's flexible budget for March?