Marvel Parts, Inc., manufactures auto accessories. One of the companys 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 $630$ hours each month to produce $2,100$ sets of covers. The standard costs associated with this level of production are Per Set Total of Covers $38,640$ $$18\mathrm{.}40$ Direct materials Direct labor Variable manufacturing overhead $($based $3\mathrm{.}001\mathrm{.}50$ $$22\mathrm{.}90$ $ $6,300$ on direct labor$-$hours$)$ $ $3,150$ During August, the factory worked only $500$ direct labor$-$hours and produced $2,000$ sets of covers. The following actual costs were recorded during the month Per Set Total of Covers Direct materials $(5,000$ yards$)$ Direct labor $$36,000$ $$18\mathrm{.}003\mathrm{.}202\mathrm{.}20$ $$23\mathrm{.}40$ $$6,400$ $ $4,400$ Variable manufacturing overhead At standard, each set of covers should require $2\mathrm{.}3$ yards of material. All of the materials purchased during the month were used in production

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The answer to requirement $1$ is as follows :

Standard direct materials cost per set of covers

$$18\mathrm{.}40$

$(/)$ Standard quantity of materials per set of covers

$2\mathrm{.}3$

Standard price of materials per yard

$$8\mathrm{.}00$

Materials price variance $=$ Actual Materials cost $-($ Standard price $*$ Actual quantity $)$

Materials price variance $=$ $$36,000-($ $$8\mathrm{.}00*5,000)=$

$$4,000$

F

Standard quantity of materials per set of covers

$2\mathrm{.}3$

$(*)$ Actual production

$2,000$

Standard quantity

$4,600$

Materials quantity variance $=($ Actual quantity $-$ Standard quantity $)*$ Standard price

Materials quantity variance $=(5,000-4,600)*$ $$8\mathrm{.}00=$

$$3,200$

U