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 | 7.40 | pounds | $ | 1.20 | per pound | $ | 8.88 | ||
Direct labor | 0.40 | hours | $ | 49.50 | per hour | $ | 19.80 | ||
Variable manufacturing overhead | 0.40 | hours | $ | 10.10 | per hour | $ | 4.04 | ||
During March, the following activity was recorded by the company:
- The company produced 4,000 units during the month.
- A total of 21,000 pounds of material were purchased at a cost of $15,180.
- There was no beginning inventory of materials on hand to start the month; at the end of the month, 5,220 pounds of material remained in the warehouse.
- During March, 1,250 direct labor-hours were worked at a rate of $46.50 per hour.
- Variable manufacturing overhead costs during March totaled $15,661.
The direct materials purchases variance is computed when the materials are purchased.
The variable overhead rate variance for March is:
Multiple Choice
-
$3,036 F
-
$3,593 U
-
$3,593 F
-
$3,036 U
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.
Standard hours per unit of output | 3.50 | DLHs | |
Standard variable overhead rate | $ | 10.85 | per DLH |
The following data pertain to operations for the last month:
Actual direct labor-hours | 9,100 | DLHs | |
Actual total variable manufacturing overhead cost | $ | 95,810 | |
Actual output | 2,400 | units | |
What is the variable overhead efficiency variance for the month?
Multiple Choice
-
$7,595 U
-
$7,333 F
-
$3,852 U
-
$7,333 U
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