Puvo, Incorporated, Manufactures a Single Product in Which Variable Manufacturing

Multiple Choice

Puvo, Incorporated, 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: During March, the following activity was recorded by the company:The company produced 5,400 units during the month.A total of 11,600 pounds of material were purchased at a cost of $32,480.There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,320 pounds of material remained in the warehouse.During March, 3,440 direct labor-hours were worked at a rate of $18.50 per hour.Variable manufacturing overhead costs during March totaled $8,972.The direct materials purchases variance is computed when the materials are purchased.The materials quantity variance for March is:

A) $7,080 Favorable
B) $17,380 Favorable
C) $17,380 Unfavorable
D) $7,080 Unfavorable