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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		7.40	pounds	$	1.20	per pound	$	8.88
Direct labor		0.40	hours	$	49.50	per hour	$	19.80
Variable manufacturing overhead		0.40	hours	$	10.10	per hour	$	4.04

During March, the following activity was recorded by the company:

• The company produced 4,000 units during the month.
• A total of 21,000 pounds of material were purchased at a cost of $15,180.
• There was no beginning inventory of materials on hand to start the month; at the end of the month, 5,220 pounds of material remained in the warehouse.
• During March, 1,250 direct labor-hours were worked at a rate of $46.50 per hour.
• Variable manufacturing overhead costs during March totaled $15,661.

The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for March is:

Multiple Choice

• $3,036 F

• $3,593 U

• $3,593 F

• $3,036 U

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours.

Standard hours per unit of output		3.50	DLHs
Standard variable overhead rate	$	10.85	per DLH

The following data pertain to operations for the last month:

Actual direct labor-hours		9,100	DLHs
Actual total variable manufacturing overhead cost	$	95,810
Actual output		2,400	units

What is the variable overhead efficiency variance for the month?

Multiple Choice

• $7,595 U

• $7,333 F

• $3,852 U

• $7,333 U

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