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Puvo, Incorporated, 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, Incorporated, 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: Direct materials Direct labor Variable manufacturing overhead Standard Quantity 7.40 pounds 0.40 hours 0.40 hours Standard Price or Rate $ 1.20 per pound $ 49.50 per hour $ 10.10 per hour Standard Cost $ 8.88 $ 19.80 $ 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
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