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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 Quantity Direct materials 5.8 pounds Standard Price Standard or Rate Cost $ 0.60 per $ 3.48 pound $33.50 per hour $16.75 $ 4.25 per hour Direct labor Variable manufacturing overhead 0.5 hours 0.5 m hours hours $8.50 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. There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,620 pounds of material remained in the warehouse. During March, 1,090 direct labor-hours were worked at a rate of $30.50 per hour. Variable manufacturing overhead costs during March totaled $14,061. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is: Multiple Choice 0 $4,796 F 0 O $5,120 V 0 O $5,120F 0 $4,796 U
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