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 small car. The company has astandard cost system in use for all of its products. According to the standards that havebeen set for the seat covers, the factory should work 1,030 hours each month to produce2,060 sets of covers. The standard costs associated with this level of production are:Per SetTotal of CoversDirect materials$39,140 $ 19.00Direct labor$ 9,2704.50Variable manufacturing overhead(based on direct labor-hours)$ 3,5021.70$25.20 2. Compute the labor rate and efficiency variances for August. (Input all amounts aspositive values. Indicate the effect of each variance by selecting "F" for favorable,"U" for unfavorable, and "None" for no effect (i.e, zero variance).)Labor rate varianceLabor efficiency variance3. Compute the variable overhead rate and efficiency variances for August. (Input allamounts as positive values. Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)Variable overhead rate varianceVariable overhead efficiency variance

The simple meaning of variance is the difference. Now in the context of standard costing, variance…

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 1,030 hours each month to produce 2,060 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers Direct materials $39,140 $ 19.00 Direct labor $ 9,270 4.50 Variable manufacturing overhead (based on direct labor-hours) $ 3,502 1.70 $25.20

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 1,030 hours each month to produce 2,060 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers Direct materials $39,140 $ 19.00 Direct labor $ 9,270 4.50 Variable manufacturing overhead (based on direct labor-hours) $ 3,502 1.70 $25.20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject: accounting
Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be adjusted to fit most cars. According to its standards, the factory should work 1,015 hours each month to produce 2,030 sets of seat covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Total $ 59,276 $ 8,120 $ 3,857 1. Materials price vanance 1. Materials quantity variance 2. Labor rate variance 2 Labor efficiency variance 3. Vanable overhead rate variance 3. Variable overhead efficiency variance Per Set of Covers During August, the factory worked 700 direct labor-hours and produced 1,500 sets of covers. The following actual costs were recorded during the month: Total $ 42,000 $ 6,300 $3,150 $ 29.20 4.00 1.90 $ 35.10 Per Set of Covers $28.00 4.20 2.10 $34.30 At standard, each set of covers should…
Tool Time manufactures carpenter-grade screwdrivers. The company is trying to decide whether to continue to make the case in which the screwdrivers are sold, or to outsource the case to another company. The direct material and direct labor cost to produce the cases total $2.40 per case. The overhead cost is $1.00 per case which consists of $0.40 in variable overhead that would be eliminated if the cases are bought from the outside supplier. The $0.60 of fixed overhead is based on expected production of 400,000 cases per year and consists of the salary of the case production manager of $80,000 per year, along with the remainder consisting of rent, insurance, and depreciation on equipment that will have no resale value. The manager will be laid off if the cases were bought externally. The outside supplier has offered to supply the cases for $3.40 each. How much will Tool Time save or lose if the cases are bought externally? Save $0.40 per case Lose $0.20 per case…
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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 1,035 hours each month to produce 2,070 sets of covers. The standard costs associated with this level of production are: Total Per Set of Covers Direct materials $ 31,878 $ 15.40 Direct labor $ 6,210 3.00 Variable manufacturing overhead (based on direct labor-hours) $ 4,347 2.10 $ 20.50 During August, the factory worked only 500 direct labor-hours and produced 1,700 sets of covers. The following actual costs were recorded during the month: Total Per Set of Covers Direct materials (5,000 yards) $ 25,500 $ 15.00 Direct labor $ 5,440 3.20 Variable manufacturing overhead $ 4,080 2.40 $ 20.60 At standard, each set of covers…
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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $520,475 + $1.49X, where X equals number of smokers. Last year, SmokeCity produced 19,100 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? $fill in the blank 2 3. What is the total fixed overhead cost incurred by SmokeCity last year? $fill in the blank 3 4. What is the total variable overhead cost incurred by SmokeCity last year? $fill in the blank 4 For questions 5-7, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary. 5. What is the overhead cost per unit produced? $fill in the blank 5 per unit 6. What is the fixed overhead cost…
Whiteside Corporation manufactures a variety of appliances which all use Part B89. Currently, Whiteside Corporation manufactures Part B89 itself. It has been producing 11,000 units of Part B89 annually. The annual costs of producing Part B89 at the level of 11,000 units include: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Answers: $3.30 $8.50 All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside supplier. Assume the company can purchase 11,000 units of the part from the Nadal Parts Company for $20.10 each, and the facilities currently used to make the part could be used to manufacture 11,000 units of another product that would have a $9 per unit contribution margin. If no additional fixed costs would be incurred, what should Whiteside Corporation do? Selected Answer: Make the new product and buy the part to earn an extra $8.30 per unit contribution to…
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