Marvel Parts, Inc.,manufactures auto accessories. One of the company’s products is aset of seat covers that can be adjusted to fit nearly any smallcar. The company has a standard cost system in use for all of itsproducts. According to the standards that have been set for theseat covers, the factory should work 1,075 hours each month toproduce 2,150 sets of covers. The standard costs associated withthis level of production are:
| Total | Per Set
of Covers |
| Direct materials | $ | 54,825 | $ | 25.50 | |
| Directlabor | $ | 10,750 | | 5.00 | |
| Variablemanufacturing overhead (based on direct labor-hours) | $ | 5,375 | | 2.50 | |
| | | $ | 33.00 | |
|
During August, thefactory worked only 800 direct labor-hours and produced 2,500 setsof covers. The following actual costs were recorded during themonth:
| Total | Per Set
of Covers |
| Direct materials (12,500 yards) | $ | 58,750 | $ | 23.50 | |
| Directlabor | $ | 13,000 | | 5.20 | |
| Variable manufacturing overhead | $ | 7,000 | | 2.80 | |
| | | $ | 31.50 | |
|
At standard, each setof covers should require 3.0 yards of material. All of thematerials purchased during the month were used in production.
Required:
1. Compute thematerials price and quantity variances for August.
2. Compute the laborrate and efficiency variances for August.
3. Compute thevariable overhead rate and efficiency variances for August.
(Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Inputall amounts as positive values.)
