Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be adjusted According to its standards, the factory should work 630 hours each month to produce 2,100 sets of seat covers. The standard associated with this level of production are: Total Direct materials $ 38,640 Per Set of Covers $ 18.40 Direct labor $ 6,300 3.00 Variable manufacturing overhead (based on direct labor-hours) $ 3,150 1.50 $ 22.90 During August, the factory worked 500 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Direct materials (5,000 yards) Direct labor Variable manufacturing overhead Total $ 36,000 $ 6,400 $ 4,400 Per Set of Covers $ 18.00 3.20 2.20 $ 23.40 At standard, each set of covers should require 2.3 yards of material. All of the materials purchased during the month were used i 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.
Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be adjusted According to its standards, the factory should work 630 hours each month to produce 2,100 sets of seat covers. The standard associated with this level of production are: Total Direct materials $ 38,640 Per Set of Covers $ 18.40 Direct labor $ 6,300 3.00 Variable manufacturing overhead (based on direct labor-hours) $ 3,150 1.50 $ 22.90 During August, the factory worked 500 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Direct materials (5,000 yards) Direct labor Variable manufacturing overhead Total $ 36,000 $ 6,400 $ 4,400 Per Set of Covers $ 18.00 3.20 2.20 $ 23.40 At standard, each set of covers should require 2.3 yards of material. All of the materials purchased during the month were used i 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
None
Transcribed Image Text: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 630 hours each month to produce 2,100 sets of seat covers. The standard cos
associated with this level of production are:
Total
Direct materials
$ 38,640
Per Set of
Covers
$ 18.40
Direct labor
$ 6,300
3.00
Variable manufacturing overhead (based on
direct labor-hours)
$ 3,150
1.50
$ 22.90
During August, the factory worked 500 direct labor-hours and produced 2,000 sets of covers. The following actual costs were
recorded during the month:
Direct materials (5,000 yards)
Direct labor
Variable manufacturing overhead
Total
Per Set of
Covers
$ 36,000
$ 6,400
$ 4,400
$ 18.00
3.20
2.20
$ 23.40
At standard, each set of covers should require 2.3 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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 15 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education