Question

# Pardoe, Inc., manufactures a single product. The company uses a standard cost system and has established...

Pardoe, Inc., manufactures a single product. The company uses a standard cost system and has established the following standards for one unit of product:

 Standard Quantity of inputs Standard Price or Rate per input Standard Cost per unit Direct materials 1.5 pounds \$3.20 per pound \$4.80 Direct labor 0.7 hours \$5.00 per hour \$3.50

Pardoe's budget for March used estimated production and sales of 2,900 units.

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

The company produced 3,000 units during the month.

A total of 5,000 pounds of material were purchased and used. The cost was \$18,000.

During March, 2000 direct labor hours were worked at a rate of \$5.50 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?

 a. \$320 F b. \$480 U c. \$960 U d. \$960 F e. \$320 U f. \$480 F

 Standard PU Qty Rate Costs Direct Material 1.50 3.20 4.80 Budgeted Units 2900 Actual Units 3000 Standard Total Qty Rate Costs Standard Total Qty Rate Costs Direct Material 4,350 3.20 13,920 Direct Material 4,500 3.20 14,400 Material Volume Variance: (Standard Units-Actual Units)*Standard Price (4350-4500)3.20 -480 Unfavourable