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 1,060 hourseach month to produce 2,120 sets of covers. The standard costsassociated with this level of production are:
Total Per Set
of Covers
Direct materials $ 43,460 $ 20.50
Direct labor $ 9,540 4.50
Variable manufacturing overhead (based on directlabor-hours) $ 4,664 2.20
$ 27.20
During August, the factory worked only 500 direct labor-hoursand produced 2,200 sets of covers. The following actual costs wererecorded during the month:
Total Per Set
of Covers
Direct materials (8,000 yards) $ 44,000 $ 20.00
Direct labor $ 10,340 4.70
Variable manufacturing overhead $ 5,500 2.50
$ 27.20
At standard, each set of covers should require 2.5 yards ofmaterial. All of the materials purchased during the month were usedin production.
Required:
1. Compute the materials price and quantity variances forAugust.
2. Compute the labor rate and efficiency variances forAugust.
3. Compute the variable overhead rate and efficiency variancesfor August.

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4.4 Ratings (867 Votes)

Req a Std qty alowed for actual output 2200250 5500 Std price per unit2050250 82 Actual qty purchhased and used 8000 Actual price per unit 440008000 55 Material qty See Answer

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Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat...

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Accounting

Answer & Explanation Solved by verified expert

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	Total		Per Set of Covers
Direct materials	$	43,460	$	20.50
Direct labor	$	9,540		4.50
Variable manufacturing overhead (based on directlabor-hours)	$	4,664		2.20
			$	27.20

	Total		Per Set of Covers
Direct materials (8,000 yards)	$	44,000	$	20.00
Direct labor	$	10,340		4.70
Variable manufacturing overhead	$	5,500		2.50
			$	27.20