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Required information (The following information applies to the questions displayed below.) Preble Company manufactures one product....


Required information (The following information applies to the questions displayed below.) Preble Company manufactures one pr
1. What is the materials price variance for March? (Indicate the effect of each variance by selecting F for favorable, U
2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting F for favorable,
5. What is the labour rate variance for March? (Indicadahe effect of ench variance by selecting F for tovorable. U for unfa
6. What is the labour efficiency variance for March? (Indicate the effect of each variance by selecting F for favorable. U
7. What is the variable overhead spending variance for March? (Do not round Intermediate calculations. Round the actual overh
8. What is the variable overhead rate variance for March? (Round the actual overhead rate to two decimal places. Indicate the
Required information (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 labour-hours, and its standard costs per unit are as follows: Direct materials: 6 kg at $9.00 per kg Direct labour: 3 hours at $15 per hour Variable overhead: 3 hours at 55 per hour $ 54.00 45.00 15.00 Total standard cost per unit $ 114.00 The company planned to produce and sell 20.000 units in March. However, during March the company actually produced and sold 25,000 units and incurred the following costs: a. Purchased 180.000 kg of raw materials at a cost of $7.50 per kg. All of this material was used in production b. Direct labour: 61,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $306.220.
1. What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).) Materials price variance
2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance.).) Materials quantity variance
5. What is the labour rate variance for March? (Indicadahe effect of ench variance by selecting F for tovorable. "U" for unfavorable, and "None' for no effectie, zero variance.). Do not round intermediate calculations.) Labour Tote variance
6. What is the labour efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (ie.. zero variance.). Do not round intermediate calculations.) Labour efficiency variance
7. What is the variable overhead spending variance for March? (Do not round Intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" Apr favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance.).) Variable overhead spending variance
8. What is the variable overhead rate variance for March? (Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance.).) Variable overhead rate variance
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Answer #1
Actual Production Std Qty Direct Material /unit Std Qty Actual Prodn Actual Material Used Std Rate /unit Actual Rate /Unit
25000 6            150,000               180,000 $             9.00 $     7.50
Actual Production Std Labor Hr /unit Std Labor Hr Actual Prodn Actual Labor Hrs Std Labor Rate /Hr Actual Labor Rate /Hr
25000 3 75000 61000 $          15.00 $   16.00
Actual Production Std Var OH Hr /unit Std Var OH Hr Actual Prodn Actual Var OH Hrs Std Var OH Rate /Hr Actual Var OH Rate /Hr
25000 3 75000 61000 $             5.00 $     5.02
              1 Direct Materials Price Variance= Actual Qty Used( Actual Rate-Std Rate)
=180000*(7.5-9)=                 27,000 (F)
              2 Direct Material Efficiency/Quantity Variance =Std Rate ( Actual Qty used-Std qty for actual output)  
=9*(180,000-150,000)                 27,000 (U)
              5 Direct Labor Rate Variance= Actual Hrs Used( Actual Rate-Std Rate)
=61000*(16-15)                 61,000 (U)
              6 Direct Labor Efficiency Variance =Std Rate ( Actual Hrs used-Std Hrs for actual output)  
   =15*(61000-75000)               210,000 (F)
7 Total Variable Overhead spending Variance= =Actual Var OH -Std Var OH for Actual Production=
=306220-75000*5 68780 (U)
8 Variable Overhead Rate Variance= Actual Qty Used( Actual Rate-Std Rate)
=61000*(5-5.02) 1220 (U)
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