20

1

Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,180 units, but its actual level of activity was 5,130 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May Data used in budgeting: Fixed element Variable element per per month unit Revenue $40.40 Direct labor Direct materials Manufacturing overhead Selling and administrative $ 0 $6.30 C 16.50 2.10 42,300 23,500 1.00 expenses Total expenses $65,800 $25.90 Actual results for May Revenue $198,610 $ 29,365 $ 81,065 $ 52,405 Selling and administrative expenses $ 23,480 Direct labor Direct materials Manufacturing overhead The spending variance for manufacturing overhead in May would be closest to Multiple Choice $668 U $773 U $773 F $668 F Help Save & Exit Sub 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 Standard Price Standard Standard Quantity or Rate Cost $ 5.50 per Direct materials 2.0 $11.00 pounds pound $16.00 per hour $ 3.75 0.6 hours Direct labor $9.60 Variable manufacturing 0.6 $ 2.25 hours per hour overhead During March, the following activity was recorded by the company The company produced 5,000 units during the month. A total of 13,500 pounds of material were purchased at a cost of $37,800. There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,700 pounds of material remained in the warehouse. During March, 3,200 direct labor-hours were worked at a rate of $16.50 per hour Variable manufacturing overhead costs during March totaled $7,400. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: Multiple Choice $4,400 F $20,800 F $20,800 U $4,400 U