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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 Quantity Standard Price or Rate Standard Cost
Direct materials 1.5 pounds $ 7.50 per pound $ 11.25
Direct labor 0.6 hours $ 24.00 per hour $ 14.40
Variable manufacturing overhead 0.6 hours $ 5.75 per hour $ 3.45

During March, the following activity was recorded by the company:

  • The company produced 6,600 units during the month.
  • A total of 13,400 pounds of material were purchased at a cost of $37,520.
  • There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,680 pounds of material remained in the warehouse.
  • During March, 4,160 direct labor-hours were worked at a rate of $24.50 per hour.
  • Variable manufacturing overhead costs during March totaled $14,552.

The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for March is

Multiple Choice:

  • $6,150 F

  • $20,620 F

  • $20,620 U

  • $6,150 U

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