Pardoe, Inc., manufactures a single product in which veriable manufacturing over

Question

Pardoe, Inc., manufactures a single product in which veriable 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 Price or Rate Standard Cost 5 pounds$5.75 per pound$14.375 $17 per hour 0.5 hours 0.5 hours $8.5 $2.00 Direct labor $4.00 per hour During March, the following activity was recorded by the company The company produced 5,200 units during the month. . There was no beginning Inventory of materals on hand to start the month; at the end of the month. A total of 16,500 pounds of material were purchased at a cost of $46,200 3.300 pounds of material remained in the warehouse During March. 2.800 direct labor-hours were worked at a rate of $17.50 per hour Vartable manufacturing overhead costs during March totaled $5,800 The direct materials purchases veriance is computed when the materials are purchased. The materials price variance for March is O $48,675u O $26.200 F O $26.20o U O $48.675 F

Explanation / Answer

Materials price variance for March = 46200-(16500*5.75)= $48675 F Option 4 is correct

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