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 uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 2,850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-houre) Total $ 42,560 $ 51,300 Direct materials (12,000 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 22.40 27.00 During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total $ 45,600 $ 49,000 $7,000 3.60 $ 53.00 Per Set of Covers $ 22.00 24.50 3.50 $50.00 At standard, each set of covers should require 5.6 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Please Do not Give Image format
recorded during the month:
Direct materials (12,000 yards)
Direct labor
Variable manufacturing overhead
Total
$ 45,600
$ 49,000
$ 7,000
At standard, each set of covers should require 5.6 yards of material. All of the materials purchased during the month were used in
production.
Per Set of
Covers
$ 22.80
24.50
3.50
$ 50.80
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
1. Materials price variance
1. Materials quantity variance
2. Labor rate variance
(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.)
2. Labor efficiency variance
3. Variable overhead rate variance
3. Variable overhead efficiency variance
Transcribed Image Text:recorded during the month: Direct materials (12,000 yards) Direct labor Variable manufacturing overhead Total $ 45,600 $ 49,000 $ 7,000 At standard, each set of covers should require 5.6 yards of material. All of the materials purchased during the month were used in production. Per Set of Covers $ 22.80 24.50 3.50 $ 50.80 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 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance (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.) 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance
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 uses a standard cost system for all of its products. According to the standards that have been
set for the seat covers, the factory should work 2,850 hours each month to produce 1,900 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)
Total
$ 42,560
$51,300.
$6,840
Direct materials (12,000 yards)
Direct labor
Variable manufacturing overhead
Per Set of
Covers
$ 22.40
27.00
During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were
recorded during the month:
Total
$ 45,600
$ 49,000
$7,000
3.60
$ 53.00
Per Set of
Covers
$ 22.80
24.50
3.50
$ 50.00
At standard, each set of covers should require 5.6 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.
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 uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 2,850 hours each month to produce 1,900 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) Total $ 42,560 $51,300. $6,840 Direct materials (12,000 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 22.40 27.00 During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total $ 45,600 $ 49,000 $7,000 3.60 $ 53.00 Per Set of Covers $ 22.80 24.50 3.50 $ 50.00 At standard, each set of covers should require 5.6 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
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Costing Systems
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education