Pardoe Inc

question 33

Multiple Choice

Pardoe 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: During March, the following activity was recorded by the company: • The company produced 3,000 units during the month.
• A total of 8,000 pounds of material were purchased at a cost of $23,000.
• There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse.
• During March, 1,600 direct labor-hours were worked at a rate of $6.50 per hour.
• Variable manufacturing overhead costs during March totaled $1,800.
The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for March is:

• A)$1,000 F
• B)$1,000 U
• C)$750 F
• D)$750 U

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Definitions:

5th Wheel

A pivoting plate attached to a vehicle's chassis (like those on semi-trucks) that enables the attachment and swivel motion of a trailer or similar component.

Locking Mechanism

A device or system designed to prevent movement or separation by securing components in place, commonly used in various types of machinery and equipment.

Drawbar Eye

The coupling eye that engages to either a pintle hook or the shank below a heavy-duty ball hitch assembly.

A-train Combination

A specific truck and trailer arrangement where a standard tractor pulls a semi-trailer which is connected to a "pup" trailer by a converter dolly, used to increase cargo capacity.