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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 Standard Price or Standard Quantity Rate Cost 5.8 pounds$ 0.60 per pound3.48 0.5 hours $33.50 per hour $16.75 Variable manufacturing overhead 0.5 hours 8.50 per hour$ 4.25 Direct materials Direct labor During March, the following activity was recorded by the company: The company produced 2,400 units during the month. A total of 19,400 pounds of material were purchased at a cost of $13,580. material remained in the warehouse During March, 1,090 direct labor-hours were worked at a rate of $30.50 per hour There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,620 pounds of Variable manufacturing overhead costs during March totaled $14,061 The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for March is: Multiple Choice 4,120 U $3,270 U
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