- Marvel Parts Incorporated Manufactures Auto Accessories One Of The Company S Products Is A Set Of Seat Covers That Ca 1 (123.96 KiB) Viewed 53 times
Marvel Parts, Incorporated, manufactures auto accessories. One of the
company's products is a set of seat covers that can be adjusted to fit nearly any small car. The
company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials. Direct labor Variable manufacturing overhead (based on direct labor-hours) Total $ 45,738 $ 6,930 $ 3,168 Direct materials (10,000 yards). Direct labor Variable manufacturing overhead Per Set of Covers $ 23.10 3.50 During August, the factory worked only 1,000 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month: Total $ 56,000 $ 9,250 $ 4,500 1.60 $ 28.20 Per Set of Covers $ 22.40 3.70 1.80 $ 27.90 At standard, each set of covers should require 3.3 yards of material. All of the materials purchased during the month were used in production. Required: 1. Compute the materials price and quantity variances for August. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Direct materials (10,000 yards). Direct labor Variable manufacturing overhead Total $ 56,000 $ 9,250 $ 4,500 At standard, each set of covers should require 3.3 yards of material. All of the materials purchased during the month were used in production. Per Set of Covers $ 22.40 3.70 1.80 $ 27.90 Required: 1. Compute the materials price and quantity variances for August. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) E 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance