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:
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Standard Quantity
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Standard Price or Rate
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Standard Cost
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Direct materials
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2.5 pounds
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$6.50 per pound
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$16.25
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Direct labor
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0.6 hours
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$20 per hour
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$12.0
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Variable manufacturing overhead
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0.6 hours
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$4.75 per hour
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$2.85
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During March, the following activity was recorded by the company:
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- The company produced 5,800 units during the month.
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- A total of 18,500 pounds of material were purchased at a cost of $51,800.
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- There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,700 pounds of material remained in the warehouse.
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- During March, 3,680 direct labor-hours were worked at a rate of $20.50 per hour.
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- Variable manufacturing overhead costs during March totaled $10,688.
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The direct materials purchases variance is computed when the materials are purchased.
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|
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The materials price variance for March is:
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- $68,450 U
- $29,300 F
- $29,300 U
- $68,450 F