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 Quantity 7.1 pounds Standard Price or Rate $ .90 per pound Standard Cos $ 6.39 Direct materials 0.5 hours $ 46.50 per hour $ 23.25 Direct labor 0.5 hours $ 9.80 per hour $ 4.90 Variable manufacturing overhead During March, the following activity was recorded by the company: The company produced 3,700 units during the month. A total of 20,700 pounds of material were purchased at a cost of $14,880. There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,920 pounds of material remained in the warehouse. During March, 1,220 direct labor-hours were worked at a rate of $43.50 per hour. Variable manufacturing overhead costs during March totaled $15,361. Saved Help Save & Exit The company produced 3,700 units during the month. A total of 20,700 pounds of material were purchased at a cost of $14,880. There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,920 pounds of material remained in the warehouse. During March, 1,220 direct labor-hours were worked at a rate of $43.50 per hour. Variable manufacturing overhead costs during March totaled $15,361. . The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is: O $3.405 F $4,037 U O $4.037 F O $3,405 U