Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the...
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Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Direct materials Direct labor Variable manufacturing overhead Standard Quantity 7.70 pounds 0.30 hours 0.30 hours Standard Price or Rate $ 1.00 per pound $52.50 per hour $10.40 per hour Standard Cost $ 7.70 $15.75 $ 3.12 During March, the following activity was recorded by the company: . The company produced 4.300 units during the month. A total of 21,300 pounds of material were purchased at a cost of $15,480. There was no beginning inventory of materials on hand to start the month: at the end of the month, 5,520 pounds of material remained in the warehouse. During March, 1.280 direct labor-hours were worked at a rate of $49.50 per hour. Variable manufacturing overhead costs during March totaled $15.961. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is: Multiple Choice 0 $2649F 0 $3,107 U O $3.107 F () $2649 U
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