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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:
The company also established the following cost formulas for its selling expenses:
The planning budget for March was based on producing and selling 25,000 units. However,
during March the company actually produced and sold 30,000 units and incurred the following
costs:
What is the spending variance related to advertising? (Input the amount as a positive value.
Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of
each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance.).)
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:
Solution
Hi,
Please find the detailed answer as follows:
Spending Variance = Actual Units*(Actual Shipping Rate - Standard Shipping Rate) =
30000*(115000/30000 - 3) = $25000 (Unfavorable)
Answer is $25000 (Unfavorable).
Thanks.
Preble Company manufactures one product- Its variable manufacturing ov.docx

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Preble Company manufactures one product- Its variable manufacturing ov.docx

  • 1. 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: The company also established the following cost formulas for its selling expenses: The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: What is the spending variance related to advertising? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.).) 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: Solution Hi, Please find the detailed answer as follows: Spending Variance = Actual Units*(Actual Shipping Rate - Standard Shipping Rate) = 30000*(115000/30000 - 3) = $25000 (Unfavorable) Answer is $25000 (Unfavorable). Thanks.