Marvel Parts, Inc., 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 b set for the seat covers, the factory should work 1,045 hours each month to produce 2,090 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers $ 49,533 $ 10,450 Direct materials $23.70 Direct labor 5.00 Variable manufacturing overhead (based on direct labor-hours) $ 4,598 2.20 $30.90 During August, the factory worked only 800 direct labor-hours and produced 1,900 sets of covers. The following actual costs were recorded during the month: Per Set Total of Covers $ 44,460 $ 9,880 $ 4,560 Direct materials (6,500 yards) $23.40 irect abor 5.20 Variable manufacturing overhead 2.40 $31.00 At standard, each set of covers should require 3.0 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.)
Marvel Parts, Inc., 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 b set for the seat covers, the factory should work 1,045 hours each month to produce 2,090 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers $ 49,533 $ 10,450 Direct materials $23.70 Direct labor 5.00 Variable manufacturing overhead (based on direct labor-hours) $ 4,598 2.20 $30.90 During August, the factory worked only 800 direct labor-hours and produced 1,900 sets of covers. The following actual costs were recorded during the month: Per Set Total of Covers $ 44,460 $ 9,880 $ 4,560 Direct materials (6,500 yards) $23.40 irect abor 5.20 Variable manufacturing overhead 2.40 $31.00 At standard, each set of covers should require 3.0 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.)
1. Materials price variance
Materials quantity variance
2. Labor rate variance
Labor efficiency variance
3. Variable overhead rate variance
Variable overhead efficiency variance
Transcribed Image Text:Marvel Parts, Inc., 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 b
set for the seat covers, the factory should work 1,045 hours each month to produce 2,090 sets of covers. The standard costs
associated with this level of production are:
Per Set
of Covers
$23.70
Total
$ 49,533
$ 10,450
Direct materials
Direct labor
5.00
Variable manufacturing overhead (based on
direct labor-hours)
$ 4,598
2.20
$30.90
During August, the factory worked only 800 direct labor-hours and produced 1,900 sets of covers. The following actual costs were
recorded during the month:
Per Set
of Covers
$23.40
Total
Direct materials (6,500 yards)
$ 44,460
$ 9,880
$ 4,560
Direct labor
5.20
Variable manufacturing overhead
2.40
$31.00
At standard, each set of covers should require 3.0 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.)
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