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

question 385

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 3,400 units during the month.A total of 20,400 pounds of material were purchased at a cost of $14,580.There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,620 pounds of material remained in the warehouse.During March, 1,190 direct labor-hours were worked at a rate of $40.50 per hour.Variable manufacturing overhead costs during March totaled $15,061.The direct materials purchases variance is computed when the materials are purchased.The variable overhead rate variance for March is:

• A) $3,756 Favorable
• B) $4,310 Unfavorable
• C) $4,310 Favorable
• D) $3,756 Unfavorable

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