Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers 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 1,015 hours each mont produce 2,030 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 $ 59,276 $ 8,120 $ 3,857 Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 29.20 4.00 During August, the factory worked only 700 direct labor-hours and produced 1,500 sets of covers. The following costs were recorded during the month: Total $ 42,000 $ 6,300 $ 3,150 1.90 $ 35.10 Per Set of Covers $ 28.00 4.20 2.10 $ 34.30 At standard, each set of covers should require 4.0 yards of material. All of the materials purchased during the mo 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 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 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 1,015 hours each mont produce 2,030 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 $ 59,276 $ 8,120 $ 3,857 Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 29.20 4.00 During August, the factory worked only 700 direct labor-hours and produced 1,500 sets of covers. The following costs were recorded during the month: Total $ 42,000 $ 6,300 $ 3,150 1.90 $ 35.10 Per Set of Covers $ 28.00 4.20 2.10 $ 34.30 At standard, each set of covers should require 4.0 yards of material. All of the materials purchased during the mo 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 unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers the
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 1,015 hours each month tc
produce 2,030 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 (8,400 yards)
Direct labor
Variable manufacturing overhead
Total
$ 59,276
$8,120
$ 3,857
During August, the factory worked only 700 direct labor-hours and produced 1,500 sets of covers. The following actu
costs were recorded during the month:
Total
$ 42,000
$ 6,300
$ 3,150
Per Set of
Covers
$ 29.20
4.00
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
1.90
$ 35.10
Answer is not complete.
At standard, each set of covers should require 4.0 yards of material. All of the materials purchased during the month
were used in production.
Per Set of
Covers
$28.00
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.
2,016
4.20
2.10
$ 34.30
(Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" fo
unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
F
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