Pardoe, Inc., manufactures a single product in which variablemanufacturing overhead is assigned on the basis of standard directlabor-hours. The company uses a standard cost system and hasestablished the following standards for one unit of product:
StandardQuantity Standard Price orRate Standard Cost Direct materials 2.5 pounds $6.50 per pound $16.25 Directlabor 0.6 hours $20 per hour $12.0 Variable manufacturing overhead 0.6 hours $4.75 per hour $2.85
During March, thefollowing activity was recorded by the company: ⢠The companyproduced 5,800 units during the month. ⢠A total of 18,500 pounds of material were purchased at a costof $51,800. ⢠There was no beginning inventory of materials on hand to startthe month; at the end of the month,
3,700 pounds of material remained in thewarehouse.
⢠During March, 3,680 direct labor-hours were worked at a rateof $20.50 per hour. ⢠Variablemanufacturing overhead costs during March totaled $10,688. The direct materialspurchases variance is computed when the materials arepurchased. The materials pricevariance for March is:
$68,450 U
$29,300 F
$29,300 U
$68,450 F
Pardoe, Inc., manufactures a single product in which variablemanufacturing overhead is assigned on the basis of standard directlabor-hours. The company uses a standard cost system and hasestablished the following standards for one unit of product:
| StandardQuantity | Standard Price orRate | Standard Cost | |
| Direct materials | 2.5 pounds | $6.50 per pound | $16.25 |
| Directlabor | 0.6 hours | $20 per hour | $12.0 |
| Variable manufacturing overhead | 0.6 hours | $4.75 per hour | $2.85 |
| During March, thefollowing activity was recorded by the company: |
| ⢠The companyproduced 5,800 units during the month. |
| ⢠A total of 18,500 pounds of material were purchased at a costof $51,800. |
| ⢠There was no beginning inventory of materials on hand to startthe month; at the end of the month, 3,700 pounds of material remained in thewarehouse. |
| ⢠During March, 3,680 direct labor-hours were worked at a rateof $20.50 per hour. |
| ⢠Variablemanufacturing overhead costs during March totaled $10,688. |
| The direct materialspurchases variance is computed when the materials arepurchased. |
| The materials pricevariance for March is: |
$68,450 U
$29,300 F
$29,300 U
$68,450 F
Related questions
Puvo, 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:
| Standard Quantity | Standard Price or Rate | Standard Cost | |||||||
| Direct materials | 1.5 | pounds | $ | 7.50 | per pound | $ | 11.25 | ||
| Direct labor | 0.6 | hours | $ | 24.00 | per hour | $ | 14.40 | ||
| Variable manufacturing overhead | 0.6 | hours | $ | 5.75 | per hour | $ | 3.45 | ||
During March, the following activity was recorded by the company:
The company produced 6,600 units during the month.
A total of 13,400 pounds of material were purchased at a cost of $37,520.
There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,680 pounds of material remained in the warehouse.
During March, 4,160 direct labor-hours were worked at a rate of $24.50 per hour.
Variable manufacturing overhead costs during March totaled $14,552.
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for March is:
Multiple Choice
$6,150 F
$20,620 F
$20,620 U
$6,150 U
15)
Kartman Corporation makes a product with the following standardcosts:
| Standard Quantity orHours | Standard Price orRate | Standard Cost PerUnit | |||||||
| Direct materials | 6.5 | pounds | $ | 7.00 | per pound | $ | 45.50 | ||
| Direct labor | 0.6 | hours | $ | 24.00 | per hour | $ | 14.40 | ||
| Variable overhead | 0.6 | hours | $ | 4.00 | per hour | $ | 2.40 | ||
In June the company's budgeted production was 3,400 units butthe actual production was 3,500 units. The company used 22,150pounds of the direct material and 2,290 direct labor-hours toproduce this output. During the month, the company purchased 25,400pounds of the direct material at a cost of $170,180. The actualdirect labor cost was $57,021 and the actual variable overhead costwas $8,931.
The company applies variable overhead on the basis of directlabor-hours. The direct materials purchases variance is computedwhen the materials are purchased.
The variable overhead rate variance for June is:
Multiple Choice
$210 U
$210 F
$229 F
$229 U
#14
Handerson Corporation makes a product with the followingstandard costs:
| Standard Quantity orHours | Standard Price orRate | ||||||||||
| Direct materials | 8.5 | kilos | $ | 6.00 | per kilo | ||||||
| Direct labor | 0.4 | hours | $ | 20.00 | per hour | ||||||
| Variable overhead | 0.4 | hours | $ | 6.00 | per hour | ||||||
The company reported the following results concerning thisproduct in August.
| Actual output | 3,200 | units | |
| Raw materials used inproduction | 29,030 | kilos | |
| Purchases of raw materials | 31,600 | kilos | |
| Actual direct labor-hours | 1,160 | hours | |
| Actual cost of raw materialspurchases | $ | 195,920 | |
| Actual direct labor cost | $ | 22,736 | |
| Actual variable overheadcost | $ | 7,540 | |
The company applies variable overhead on the basis of directlabor-hours. The direct materials purchases variance is computedwhen the materials are purchased.
The labor rate variance for August is:
Multiple Choice
$512 U
$512 F
$464 U
$464 F
#15
Kartman Corporation makes a product with the following standardcosts:
| Standard Quantity orHours | Standard Price orRate | Standard Cost PerUnit | |||||||
| Direct materials | 6.5 | pounds | $ | 7.00 | per pound | $ | 45.50 | ||
| Direct labor | 0.6 | hours | $ | 24.00 | per hour | $ | 14.40 | ||
| Variable overhead | 0.6 | hours | $ | 4.00 | per hour | $ | 2.40 | ||
In June the company's budgeted production was 3,400 units butthe actual production was 3,500 units. The company used 22,150pounds of the direct material and 2,290 direct labor-hours toproduce this output. During the month, the company purchased 25,400pounds of the direct material at a cost of $170,180. The actualdirect labor cost was $57,021 and the actual variable overhead costwas $8,931.
The company applies variable overhead on the basis of directlabor-hours. The direct materials purchases variance is computedwhen the materials are purchased.
The variable overhead rate variance for June is:
Multiple Choice
$210 U
$210 F
$229 F
$229 U
