Question
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 $ 4.50 per pound $ 6.75 Direct labor 0.6 hours $ 12.00 per hour $ 7.20 Variable manufacturing overhead 0.6 hours $ 2.75 per hour $ 1.65 During March, the following activity was recorded by the company: The company produced 4,200 units during the month. A total of 9,800 pounds of material were purchased at a cost of $27,440. There was no beginning inventory of materials on hand to start the month; at the end of the month, 1,960 pounds of material remained in the warehouse. During March, 2,720 direct labor-hours were worked at a rate of $12.50 per hour. Variable manufacturing overhead costs during March totaled $4,688. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: Multiple
Choice
$6,930 F
$14,140 F
$14,140 U
$6,930 U
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