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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on...

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Accounting

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 materials: 5 pounds at $8 per pound $ 40
Direct labor: 3 hours at $15 per hour 45
Variable overhead: 3 hours at $9 per hour 27
Total standard cost per unit $ 112

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:

  1. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production.

  2. Direct laborers worked 70,000 hours at a rate of $16 per hour.

  3. Total variable manufacturing overhead for the month was $655,200.

rev: 11_20_2017_QC_CS-109672

6. If Preble had purchased 185,000 pounds of materials at $6.50 per pound and used 160,000 pounds in production, what would be 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 (i.e., zero variance.). Input all amounts as positive values.)

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