Marvel Parts, Inc., manufactures auto accessories. Oneof the company’s products is a set of seat covers that can beadjusted to fit nearly any small car. The company has a standardcost system in use for all of its products. According to thestandards that have been set for the seat covers, the factoryshould work 1,055 hours each month to produce 2,110 sets of covers.The standard costs associated with this level of productionare:
| Total | Per Set of Covers |
Direct materials | $ | 51,273 | $ | 24.3 | |
Direct labor | $ | 10,550 | | 5.0 | |
Variable manufacturing overhead (based on directlabor-hours) | $ | 4,853 | | 2.3 | |
| | | $ | 31.60 | |
|
During August, the factory worked only 1,000 directlabor-hours and produced 2,100 sets of covers. The following actualcosts were recorded during the month:
| Total | Per Set of Covers |
Direct materials (6,800 yards) | $ | 49,980 | $ | 23.8 | |
Direct labor | $ | 10,920 | | 5.2 | |
Variable manufacturing overhead | $ | 5,460 | | 2.6 | |
| | | $ | 31.60 | |
|
At standard, each set of covers should require 3.0 yardsof material. All of the materials purchased during the month wereused in production.
Required:
1. Compute the materials price and quantity variancesfor August.
2. Compute the labor rate and efficiency variances forAugust.
3. Compute the variable overhead rate and efficiencyvariances for August.
