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 been set for the seat covers, the factory should work 2,450 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are as follows: Direct materials Direct labour Variable manufacturing overhead (based on direct labour hours) Direct materials (12.000 metres) Direct labour Variable manufacturing overhead 1.60 $35.00 During August, the factory worked only 2,800 direct labour hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total $42,560 317,100 Total 145.600 $18,200 $7,000 2. The labour rate and eliciency variances 3. The variable overhead spending and efficiency variances. 36,340 Por at of Cases $22.40 9.00 At standard, each set of covers thould require 5.6 metres of material All of the materials purchased during the month were used in production. Required Compute the following variances for August 1. The materials price and quantity variances. Per Set of Comm $22.30 9.10 3.50 $35.40 BARK IS OUDVORS
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 been set for the seat covers, the factory should work 2,450 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are as follows: Direct materials Direct labour Variable manufacturing overhead (based on direct labour hours) Direct materials (12.000 metres) Direct labour Variable manufacturing overhead 1.60 $35.00 During August, the factory worked only 2,800 direct labour hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total $42,560 317,100 Total 145.600 $18,200 $7,000 2. The labour rate and eliciency variances 3. The variable overhead spending and efficiency variances. 36,340 Por at of Cases $22.40 9.00 At standard, each set of covers thould require 5.6 metres of material All of the materials purchased during the month were used in production. Required Compute the following variances for August 1. The materials price and quantity variances. Per Set of Comm $22.30 9.10 3.50 $35.40 BARK IS OUDVORS
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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 neady 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 2,450 hours
each month to produce 1,900 sets of covers. The standard costs associated with this level of production are as follows:
Page 432
Direct materials
Direct labour
Variable manufacturing overhead (based on direct
labour hours)
Direct materials (12,000 metres)
Direct labour
Variable manufacturing overhead
Total
$42,560
Total
$45,600
$18,200
$7,000
2. The labour rate and efficiency variances.
3. The variable overhead spending and efficiency variances.
$17,100
3.60
$35.00
During August, the factory worked only 2,500 direct labour hours and produced 2,000 sets of covers. The following actual costs were recorded during the month:
96,340
Profes
$22.40
9.00
At standard, each set of covers thould require 5.6 metres of material. All of the materials purchased during the month were used in production.
Required
Compute the following variances for August
1. The materials price and quantity variances.
Per Set of Cons
$22.30
9.10
3.50
$35.40
40
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