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 1,015 hours each month to produce 2,030 sets of covers. The standard costs associated with this level of production are:
Marvel Parts, Inc., 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 1,015 hours each month to produce 2,030 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers $59,276 $29.20 $ 8,120 4.00 Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) $ 3,857 1.90 $ 35.10 During August, the factory worked only 700 direct labor-hours and produced 1,500 sets of covers. The following actual costs were recorded during the month: Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Per Set Total of Covers $42,000 $28.00 $ 6,300 4.20 $ 3,150 2.10 $34.30 At standard, each set of covers should require 4.00 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. (Input all amounts as positive values. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e, zero varlance).) At standard, each set of covers should require 4.00 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. (Input all amounts as positive values. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e, zero variance).) Materials price variance Materials quantity variance 2. Compute the labor rate and efficiency variances for August. (Input all amounts as positive values. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e, zero variance).) Labor rate variance Labor efficiency variance 3. Compute the variable overhead rate and efficiency variances for August. (Input all amounts as positive values. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e, zero varlance).) Variable overhead rate variance Variable overhead efficiency variance
