Marvel Parts, Inc., manufactures auto accessories. One of the
company’s products is a set of seat...
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Accounting
Marvel Parts, Inc., manufactures auto accessories. One of thecompany’s products is a set of seat covers that can be adjusted tofit nearly any small car. The company has a standard cost system inuse for all of its products. According to the standards that havebeen set for the seat covers, the factory should work 995 hourseach month to produce 1,990 sets of covers. The standard costsassociated with this level of production are:
Total
Per Set of Covers
Direct materials
$
47,362
$
23.80
Direct labor
$
8,955
4.50
Variable manufacturing overhead (based on direct labor-hours)
$
2,388
1.20
$
29.50
During August, the factory worked only 1,000 direct labor-hoursand produced 2,300 sets of covers. The following actual costs wererecorded during the month:
Total
Per Set of Covers
Direct materials (8,800 yards)
$
50,600
$
22.00
Direct labor
$
10,580
4.60
Variable manufacturing overhead
$
4,600
2.00
$
28.60
At standard, each set of covers should require 3.50 yards ofmaterial. All of the materials purchased during the month were usedin production.
Required:
1.
Compute the materials price and quantity variances for August.(Input all amounts as positive values. Indicate the effectof each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
2.
Compute the labor rate and efficiency variances for August.(Input all amounts as positive values. Indicate the effectof each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
3.
Compute the variable overhead rate and efficiency variances forAugust. (Input all amounts as positive values. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
Answer & Explanation
Solved by verified expert
3.6 Ratings (358 Votes)
All working forms part of the answer Workings Actual DATA for 2300 units Quantity AQ Rate AR Actual Cost Direct Material 8800 5750 5060000 Direct labor 1000 1058 1058000 Variable Overhead 1000 460 460000 Standard DATA for 2300 units Quantity SQ
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