Question
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
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 5.8 pounds Standard Price or Rate. $ 0.60 per pound Standard Cost 0.5 hours $ 33.50 per hour 0.5 hours $8.50 per hour $ 3.48 $ 16.75 $4.25 During Merch, 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 Merch totaled $14,061 The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is
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