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. (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 2 Variable
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. (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 2 Variable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:es
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.
(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
< Prev
6 of 6
Next
![Problem 9-24 (Algo) Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6]
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 1,040 hours each month to produce 2,080 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 (5,000 yards)
Direct labor
Variable manufacturing overhead
During August, the factory worked only 600 direct labor-hours and produced 1,800 sets of covers. The following actual
costs were recorded during the month:
Total
$ 40,560
$ 7,280
$ 4,160
E
R
Total
$ 34,200
$ 6,660
$ 4,140
< Prev
Per Set of
Covers
$19.50
3.50
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.
6 of 6
2.00
$ 25.00
H
Per Set of
Covers
$ 19.00
3.70
2.30
$ 25.00
www
www
Next
JL](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9583b3e-6ff6-40fa-a6f7-68d8d6061725%2Fb3419d19-862b-4ec2-9d9b-1130f720c826%2F5ibferb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 9-24 (Algo) Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6]
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 1,040 hours each month to produce 2,080 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 (5,000 yards)
Direct labor
Variable manufacturing overhead
During August, the factory worked only 600 direct labor-hours and produced 1,800 sets of covers. The following actual
costs were recorded during the month:
Total
$ 40,560
$ 7,280
$ 4,160
E
R
Total
$ 34,200
$ 6,660
$ 4,140
< Prev
Per Set of
Covers
$19.50
3.50
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.
6 of 6
2.00
$ 25.00
H
Per Set of
Covers
$ 19.00
3.70
2.30
$ 25.00
www
www
Next
JL
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