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Save & Exit Puvo, Incorporated, manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The
Save & Exit 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 0.5 hours Standard Price or Rate Standard Cost $ 0.60 per pound $33.50 per hour $8.50 per hour $ 3.48 $ 16.75 $ 4.25 0.5 hours During March, 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 March totaled $14,061. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for March is:
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