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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:
Standard Quantity of inputs
Standard Price or Rate per input
Standard Cost per unit
Direct materials
1.5 pounds
$3.00 per pound
$4.50
Direct labor
0.6 hours
$6.00 per hour
$3.60
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?
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