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 1,075 hours each month to produce 2,150 sets of seat covers. The standard costs associated with this level of production are: Total Direct materials $ 54,825 Direct labor $ 10,750 Per Set of Covers $ 25.50 5.00 Variable manufacturing overhead (based on direct labor-hours) $ 5,375 2.50 $ 33.00 During August, the factory worked 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month: Total Direct materials (12,500 yards) Direct labor $ 58,750 $ 13,000 Variable manufacturing overhead $ 7,000 Per Set of Covers $ 23.50 5.20 2.80 $ 31.50 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. Note: Do not round intermediate calculations. 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 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance
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 1,075 hours each month to produce 2,150 sets of seat covers. The standard costs associated with this level of production are: Total Direct materials $ 54,825 Direct labor $ 10,750 Per Set of Covers $ 25.50 5.00 Variable manufacturing overhead (based on direct labor-hours) $ 5,375 2.50 $ 33.00 During August, the factory worked 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month: Total Direct materials (12,500 yards) Direct labor $ 58,750 $ 13,000 Variable manufacturing overhead $ 7,000 Per Set of Covers $ 23.50 5.20 2.80 $ 31.50 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. Note: Do not round intermediate calculations. 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 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 1,075 hours each month to produce 2,150 sets of seat covers. The standard costs
associated with this level of production are:
Total
Direct materials
$ 54,825
Direct labor
$ 10,750
Per Set of
Covers
$ 25.50
5.00
Variable manufacturing overhead (based on
direct labor-hours)
$ 5,375
2.50
$ 33.00
During August, the factory worked 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were
recorded during the month:
Total
Direct materials (12,500 yards)
Direct labor
$ 58,750
$ 13,000
Variable manufacturing overhead
$ 7,000
Per Set of
Covers
$ 23.50
5.20
2.80
$ 31.50
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.
Note: Do not round intermediate calculations. 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
1. Materials quantity variance
2. Labor rate variance
2. Labor efficiency variance
3. Variable overhead rate variance
3. Variable overhead efficiency variance
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