Puvo, Inc., 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 Standard Price or Rate Standard Cost Direct materials 1.5 pounds $ 7.50 per pound $ 11.25 Direct labor 0.6 hours $ 24.00 per hour $ 14.40 Variable manufacturing overhead 0.6 hours $ 5.75 per hour $ 3.45
During March, the following activity was recorded by the company:
The company produced 6,600 units during the month.
A total of 13,400 pounds of material were purchased at a cost of $37,520.
There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,680 pounds of material remained in the warehouse.
During March, 4,160 direct labor-hours were worked at a rate of $24.50 per hour.
Variable manufacturing overhead costs during March totaled $14,552.
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for March is:
Multiple Choice
$6,150 F
$20,620 F
$20,620 U
$6,150 U
Puvo, Inc., 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 | Standard Price or Rate | Standard Cost | |||||||
Direct materials | 1.5 | pounds | $ | 7.50 | per pound | $ | 11.25 | ||
Direct labor | 0.6 | hours | $ | 24.00 | per hour | $ | 14.40 | ||
Variable manufacturing overhead | 0.6 | hours | $ | 5.75 | per hour | $ | 3.45 | ||
During March, the following activity was recorded by the company:
The company produced 6,600 units during the month.
A total of 13,400 pounds of material were purchased at a cost of $37,520.
There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,680 pounds of material remained in the warehouse.
During March, 4,160 direct labor-hours were worked at a rate of $24.50 per hour.
Variable manufacturing overhead costs during March totaled $14,552.
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for March is:
Multiple Choice
$6,150 F
$20,620 F
$20,620 U
$6,150 U