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		7.30	pounds	$	1.10	per pound	$	8.03
Direct labor		0.40	hours	$	48.50	per hour	$	19.40
Variable manufacturing overhead		0.40	hours	$	10.00	per hour	$	4.00

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

• The company produced 3,900 units during the month.
• A total of 20,900 pounds of material were purchased at a cost of $15,080.
• There was no beginning inventory of materials on hand to start the month; at the end of the month, 5,120 pounds of material remained in the warehouse.
• During March, 1,240 direct labor-hours were worked at a rate of $45.50 per hour.
• Variable manufacturing overhead costs during March totaled $15,561.

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

The variable overhead rate variance for March is:

Multiple Choice

• $3,161 F

• $3,697 F

• $3,161 U

• $3,697 U