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Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the...

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Accounting

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 Rate Standard Cost
Direct materials 2.0 pounds $4.75 per pound $9.50
Direct labor 0.5 hours $13 per hour $6.5
Variable manufacturing overhead 0.5 hours $3.00 per hour $1.50

During March, the following activity was recorded by the company:
The company produced 4,400 units during the month.
A total of 12,300 pounds of material were purchased at a cost of $34,440.

There was no beginning inventory of materials on hand to start the month; at the end of the month,

2,460 pounds of material remained in the warehouse.
During March, 2,400 direct labor-hours were worked at a rate of $13.50 per hour.
Variable manufacturing overhead costs during March totaled $3,800.
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for March is:

$4,940 F

$18,640 F

$18,640 U

$4,940 U

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