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: Standard Quantity Standard Price or Standard Rate Cost Direct materials 2.0 pounds $6.25 per pound $12.50 Direct labor 0.5 hours $19 per hour $9.5 Variable manufacturing 0.5 hours $4.50 per hour $2.25 overhead During March, the following activity was recorded by the company: -The company produced 5,600 units during the month. -A total of 14,700 pounds of material were purchased at a cost of $41,160. -There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,940 pounds of material remained in the warehouse. -During March, 3,000 direct labor hours were worked at a rate of $19.50 per hour. -Variable manufacturing overhead costs during March totaled $6,950. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: a. $3,500 F b. $22,960 F c. $22,960 U d. $3,500 U

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: Standard Quantity Standard Price or Standard Rate Cost Direct materials 2.0 pounds $6.25 per pound $12.50 Direct labor 0.5 hours $19 per hour $9.5 Variable manufacturing 0.5 hours $4.50 per hour $2.25 overhead During March, the following activity was recorded by the company: -The company produced 5,600 units during the month. -A total of 14,700 pounds of material were purchased at a cost of $41,160. -There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,940 pounds of material remained in the warehouse. -During March, 3,000 direct labor hours were worked at a rate of $19.50 per hour. -Variable manufacturing overhead costs during March totaled $6,950. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: a. $3,500 F b. $22,960 F c. $22,960 U d. $3,500 U

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 9CE: Patterson Company produces wafers for integrated circuits. Data for the most recent year are...

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