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 2.5 pounds $ 5.75 per pound $ 14.38 Direct labor 0.5 hours $ 17.00 per hour $ 8.50 Variable manufacturing overhead 0.5 hours $ 4.00 per hour $ 2.00 During March, the following activity was recorded by the company: The company produced 5,200 units during the month. A total of 16,500 pounds of material were purchased at a cost of $46,200. There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,300 pounds of material remained in the warehouse. During March, 2,800 direct labor-hours were worked at a rate of $17.50 per hour. Variable manufacturing overhead costs during March totaled $5,800 The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is
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