Puvo, Incorporated, Manufactures a Single Product in Which Variable Manufacturing

question 311

Multiple Choice

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: 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 materials price variance for March is:

• A) $1,940 Unfavorable
• B) $1,940 Favorable
• C) $1,750 Favorable
• D) $1,750 Unfavorable

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Definitions:

Just Cause Discipline

A principle that requires employers to have a fair and valid reason for any disciplinary action, including termination, against employees.

Rights Disputes

Situations where there is a conflict or disagreement over legal entitlements or guaranteed protections, often within the context of employment or civil rights.

Outsourcing

The practice of having certain job functions performed outside of a company, typically by another company or individuals, to save costs or access specialized skills not available internally.

Successorship Clause

A provision in a labor contract ensuring that a new owner of a company recognizes and negotiates with the existing union representing the workers.