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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 standard cost
Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses standard cost system and has established the following standards for one unit of product: Direct materials Direct labor Variable manufacturing overhead Standard Quantity 6.10 pounds 0.50 hours 0.50 hours Standard Price or Rate $ 90 per pound $36.50 per hour $ 8.80 per hour Standard Cost $ 5.49 $18.25 $ 4.40 During March, the following activity was recorded by the company: The company produced 2,700 units during the month. A total of 19,700 pounds of material were purchased at a cost of $13,880. There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,920 pounds of material remained in the warehouse. During March, 1,120 direct labor-hours were worked at a rate of $33.50 per hour. Variable manufacturing overhead costs during March totaled $14,361. . . The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is
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