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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
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 Cost $4.00 per pound $8.00 $10.00 per hour 6.00 $2.25 per hour 1.35 Standard Quantity 2.0 pounds 0.6 hours 0.6 hours or Rate Direct materials Direct labor Variable manufacturing overhead During March, the following activity was recorded by the company The company produced 3,800 units during the month A total of 11,100 pounds of material were purchased at a cost of $31,080 There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,220 pounds of material remained in the warehouse During March, 2,480 direct labor-hours were worked at a rate of $10.50 per hour Variable manufacturing overhead costs during March totaled $3,548. The direct materials purchases variance is computed when the materials are purchased The materials quantity variance for March is Multiple Choice $5,120 F $16,480 F $16,480 U $5,120 U
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