Problem
Pardoe, Inc., manufactures a single product. The company uses a standard cost system and has established the following standards for one unit of product:
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Standard Quantity of inputs
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Standard Price or Rate per input
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Standard Cost per unit
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Direct materials
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1.5 pounds
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$3.00 per pound
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$4.50
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|
Direct labor
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0.6 hours
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$6.00 per hour
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$3.60
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Pardoe's budget for March used estimated production and sales of 2,800 units.
During March, the following activity was recorded by the company:
• The company produced 3,000 units during the month.
• A total of 8,000 pounds of material were purchased and used. The cost was $23,000.
• During March, 1600 direct labor hours were worked at a rate of $6.50 per hour.
For all of these Pardoe questions, pick the closest answer numerically and then choose based on the U or F.
What would be the volume variance for materials for March?