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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 Standard Price or Rate Standard Cost
Direct materials 5.8 pounds $ 0.60 per pound $ 3.48
Direct labor 0.5 hours $ 33.50 per hour $ 16.75
Variable manufacturing overhead 0.5 hours $ 8.50 per hour $ 4.25

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 materials quantity variance for March is:

Multiple Choice

  • $1,116 U

  • $1,116 F

  • $1,302 F

  • $1,302 U

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