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 QuantityStandard Price or RateStandard CostDirect materials 5.8pounds$0.60per pound$3.48Direct labor 0.5hours$33.50per hour$16.75Variable manufacturing overhead 0.5hours$8.50per hour$4.25During 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 materials quantity variance for March is:
A. $1,302 U
B. $1,302 F
C. $1,116 F
D. $1,116 U
Answer: D
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