90.2K

Verified Solution

Link Copied!

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 $

$1$

$1$

$.$

$0$

$0$

$$per pound $

$5$

$5$

$.$

$0$

$0$

$$Direct labor:

$3$

$$hours at $

$1$

$2$

$$per hour

$3$

$6$

$.$

$0$

$0$

$$Variable overhead:

$3$

$$hours at $

$7$

$$per hour

$2$

$1$

$.$

$0$

$0$

$$Total standard variable cost per unit $

$1$

$1$

$2$

$.$

$0$

$0$

$$The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $

$2$

$8$

$0$

$,$

$0$

$0$

$0$

$$Sales salaries and commissions $

$2$

$6$

$0$

$,$

$0$

$0$

$0$

$$$

$2$

$0$

$.$

$0$

$0$

$$Shipping expenses $

$1$

$1$

$.$

$0$

$0$

$$The planning budget for March was based on producing and selling

$2$

$1$

$,$

$0$

$0$

$0$

$$units$.$ However, during March the company actually produced and sold

$2$

$6$

$,$

$6$

$0$

$0$

$$units and incurred the following costs: Purchased

$1$

$5$

$4$

$,$

$0$

$0$

$0$

$$pounds of raw materials at a cost of $

$9$

$.$

$5$

$0$

$$per pound. All of this material was used in production. Direct

$-$

laborers worked

$6$

$3$

$,$

$0$

$0$

$0$

$$hours at a rate of $

$1$

$3$

$.$

$0$

$0$

$$per hour. Total variable manufacturing overhead for the month was $

$5$

$1$

$0$

$,$

$9$

$3$

$0$

$.$

$$Total advertising, sales salaries and commissions, and shipping expenses were $

$2$

$8$

$6$

$,$

$0$

$0$

$0$

$,$

$$$

$4$

$9$

$5$

$,$

$0$

$0$

$0$

$,$

$$and $

$1$

$9$

$5$

$,$

$0$

$0$

$0$

$,$

$$respectively$.$

$6$

$.$

$$What direct labor cost would be included in the company

$$

s flexible budget for March?

Answer & Explanation Solved by verified expert

See Answer