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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 1,060 hours each month to produce 2,120 sets of 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 (8,000 yards) Direct labor Variable manufacturing overhead Total $ 43,460 $ 9,540 $ 4,664 During August, the factory worked only 500 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers Total $ 44,000 $ 10,340 $ 5,500 ari Materials price variance or Materials quantity variance Labor rate variance $ 20.50 4.50 Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance 2.20 $ 27.20 Per Set of Covers At standard, each set of covers should require 2.5 yards of material. All of the materials purchased during the month were used in production. $ 20.00 4.70 2.50 $ 27.20 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. (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.)

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 1,060 hours each month to produce 2,120 sets of 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 (8,000 yards) Direct labor Variable manufacturing overhead Total $ 43,460 $ 9,540 $ 4,664 During August, the factory worked only 500 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers Total $ 44,000 $ 10,340 $ 5,500 ari Materials price variance or Materials quantity variance Labor rate variance $ 20.50 4.50 Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance 2.20 $ 27.20 Per Set of Covers At standard, each set of covers should require 2.5 yards of material. All of the materials purchased during the month were used in production. $ 20.00 4.70 2.50 $ 27.20 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. (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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 1,060 hours each month to produce 2,120 sets of 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 (8,000 yards) Direct labor Variable manufacturing overhead Total $ 43,460 $ 9,540 $ 4,664 During August, the factory worked only 500 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 20.50 4.50 Total $ 44,000 $ 10,340 $ 5,500 2.20 $ 27.20 bari Materials price variance or Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance Per Set of Covers $ 20.00 4.70 2.50 $ 27.20 At standard, each set of covers should require 2.5 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. (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.)
Transcribed Image Text: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 1,060 hours each month to produce 2,120 sets of 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 (8,000 yards) Direct labor Variable manufacturing overhead Total $ 43,460 $ 9,540 $ 4,664 During August, the factory worked only 500 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 20.50 4.50 Total $ 44,000 $ 10,340 $ 5,500 2.20 $ 27.20 bari Materials price variance or Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance Per Set of Covers $ 20.00 4.70 2.50 $ 27.20 At standard, each set of covers should require 2.5 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. (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.)
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