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:

Standard QuantityStandard Price or RateStandard CostDirect materials6.90pounds$ 0.70per pound$ 4.83Direct labor0.60hours$ 44.50per hour$ 26.70Variable manufacturing overhead0.60hours$ 9.60per hour$ 5.76

During March, the following activity was recorded by the company:

• The company produced 3,500 units during the month.
• A total of 20,500 pounds of material were purchased at a cost of $14,680.
• There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,720 pounds of material remained in the warehouse.
• During March, 1,200 direct labor-hours were worked at a rate of $41.50 per hour.
• Variable manufacturing overhead costs during March totaled $15,161.

The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for March is:

Multiple Choice

$3,641 F

$4,355 U

$4,355 F

$3,641 U