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: Standard Quantity 5.8 pounds Standard Price or Rate Standard Cost Direct materials $ 0.60 per pound $ 33.50 per hour $ 8.50 per hour $ 3.48 $ 16.75 $ 4.25 Direct labor 0.5 hours Variable manufacturing overhead 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 variable overhead rate variance for March is:

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: Standard Quantity 5.8 pounds Standard Price or Rate Standard Cost Direct materials $ 0.60 per pound $ 33.50 per hour $ 8.50 per hour $ 3.48 $ 16.75 $ 4.25 Direct labor 0.5 hours Variable manufacturing overhead 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 variable overhead rate variance for March is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: Inputs (1)StandardQuantityor Hours (2)StandardPriceor Rate StandardCost(1) × (2) Direct materials 6 pounds $3 per pound $ 18.00 Direct labor 0.8 hours $15 per hour 12.00 Variable manufacturing overhead 0.8 hours $3 per hour 2.40 Total standard cost per unit $32.40 TotalStandardCost* Variances Reported Priceor Rate Quantity orEfficiency Direct materials $405,000 $6,900 F $9,000 U Direct labor $ 270,000 $14,550 U $21,000 U Variable manufacturing overhead $54,000 $1,300 F $? U *Applied to Work in Process during the period. The company’s manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. Required: How many units were produced last…
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