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 Standard Price or Rate Standard Cost Direct materials 7.1 pounds $ .90 per pound $ 6.39 Direct labor 0.5 hours $ 46.50 per hour $ 23.25 Variable manufacturing overhead 0.5 hours $ 9.80 per hour $ 4.90   During March, the following activity was recorded by the company:   The company produced 3,700 units during the month. A total of 20,700 pounds of material were purchased at a cost of $14,880. There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,920 pounds of material remained in the warehouse. During March, 1,220 direct labor-hours were worked at a rate of $43.50 per hour. Variable manufacturing overhead costs during March totaled $15,361.   The direct materials purchases variance is computed when the materials are purchased.   The variable overhead rate variance for March is:

FINANCIAL ACCOUNTING
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Author:Libby
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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 Standard Price or Rate Standard Cost
Direct materials 7.1 pounds $ .90 per pound $ 6.39
Direct labor 0.5 hours $ 46.50 per hour $ 23.25
Variable manufacturing overhead 0.5 hours $ 9.80 per hour $ 4.90

 

During March, the following activity was recorded by the company:

 

  • The company produced 3,700 units during the month.
  • A total of 20,700 pounds of material were purchased at a cost of $14,880.
  • There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,920 pounds of material remained in the warehouse.
  • During March, 1,220 direct labor-hours were worked at a rate of $43.50 per hour.
  • Variable manufacturing overhead costs during March totaled $15,361.

 

The direct materials purchases variance is computed when the materials are purchased.

 

The variable overhead rate variance for March is:

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