Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Principles And Techniques

Authors: Richard L. Ratliff, W. Wallace, Walter B. Mcfarland, J. Loeboecke

2nd Edition

0894133268, 978-0894133268

More Books

Students also viewed these Accounting questions

Question

Verify the statement made in the remark following Example 10.2.

Answered: 1 week ago

Question

What is meant by organisational theory ?

Answered: 1 week ago

Question

What is meant by decentralisation of authority ?

Answered: 1 week ago

Question

Briefly explain the qualities of an able supervisor

Answered: 1 week ago

Question

Define policy making?

Answered: 1 week ago

Question

Define co-ordination?

Answered: 1 week ago

Question

2. When is the job to be completed?

Answered: 1 week ago

Question

What are the steps involved in the HR planning process?

Answered: 1 week ago