Not looking for answers, but need help working these out.

[CharlieChaplin]

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 $8.00 per pound $ 40.00
Direct labor: 2 hours at $14 per hour 28.00
Variable overhead: 2 hours at $5 per hour 10.00

Total standard cost per unit $ 78.00

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:

a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production.
b. Direct laborers worked 55,000 hours at a rate of $15.00 per hour.
c. Total variable manufacturing overhead for the month was $280,500.

1. What raw materials cost would be included in the company’s planning budget for March?

Raw material cost = $1,000,000

2. What raw materials cost would be included in the company’s flexible budget for March?

Raw material cost = $1,200,000

3. What is the materials price variance for March?

Materials price variance = $80,000 - Favorable

4. What is the materials quantity variance for March?

Materials quantity variance = $80,000 - Unfavorable

5. If Preble had purchased 170,000 pounds of materials at $7.50 per pound and used 160,000 pounds in production, what would be the materials price variance for March?

Materials price variance = $85,000 - Favorable

6. If Preble had purchased 170,000 pounds of materials at $7.50 per pound and used 160,000 pounds in production, what would be the materials quantity variance for March?

Materials quantity variance = $(80,000) - Unfavorable

7. What direct labor cost would be included in the company’s planning budget for March?

Direct labor cost = $700,000

8. What direct labor cost would be included in the company’s flexible budget for March?

Direct labor cost = $ ???

9. What is the labor rate variance for March?

Labor rate variance = $(55,000) - Unfavorable

10. What is the labor efficiency variance for March?

Labor efficiency variance = $ ???

11. What is the labor spending variance for March?

Labor spending variance = $ ???

12. What variable manufacturing overhead cost would be included in the company’s planning budget for March?

Variable manufacturing overhead cost = $ ???

13. What variable manufacturing overhead cost would be included in the company’s flexible budget for March?

Variable manufacturing overhead cost = $ ???

14. What is the variable overhead rate variance for March?

Variable overhead rate = ???

15. What is the variable overhead efficiency variance for March?

Variable overhead efficiency variance = ???

 

[dratsab]

I'm learning accounting as well, and pretty new, so I can't help as well as others, but...

I believe your labor efficiency variance should be your standard price of labor x (standard labor - actual labor).

Is spending variance actual price and labor - standard price and labor? I don't remember right off. Variable overhead should mimic labor if I am correct. Also, when doing the variable overhead calculations you should use the same hours as labor (55,000) to calculate, pretty sure. Sorry I can't help more.

 

[nottony1]

This might be a little late, but I am doing the same assignment...
Sorry for posting in pieces, but I'm just going to post as I go along.
...

8.) Simply multiply 28(actual price) x 30,000 (actual output)= 840,000

10.) Labor efficiency variance= (Actual Hours x Standard Rate) - (Standard Hours x Standard Rate)--> (55,000 x 14) - (60,000 x 14)-->770,000-840,000= 70,000 favorable.

11.) Labor Spending Variance is the total of labor rate variance and labor efficiency variance.
Because we had a 55,000 unfavorable (essentially negative) and 70,000 favorable (positive),
we would take 70,000 fav. - 55,000 unfav.= 15,000 favorable.

12.) Variable Overhead= $10/ unit. The company plans on selling 25,000 units. 25,000 x 10= 250,000.

13.) Same as above but the company actually sells 30,000 units. 30,000 x 10= 300,000.

14.) Variable Overhead Rate Variance= (AH x AR) - (AH x SR)= (55,000 x 5.1) - (55,000 x 5)= 280,500- 275,000= 5,500 unfavorable. The actual cost was given to us in the problem --> 280,500. I found AR by dividing 280,500 by 55,000, which gives us 5.1. **This is unnecessary

15.) Variable Overhead Efficiency Rate= (AH x SR) - (SH x SR)= (55,000 x 5) - (60,000 x 5)= 275,000 - 300,000= 25,000 favorable



***Sorry for grammatical errors or anything else I fudged up on.