Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 980 hours each month to produce 1,960 sets of covers. The standard costs associated with this level of production are:

Total Per Set of Covers
Direct materials $ 32,340 $ 16.50
Direct labor $ 6,860 3.50
Variable manufacturing overhead (based on direct labor-hours) $ 1,960 1.00
$ 21.00

During August, the factory worked only 1,000 direct labor-hours and produced 2,100 sets of covers. The following actual costs were recorded during the month:

Total Per Set of Covers
Direct materials (6,000 yards) $ 34,020 $ 16.20
Direct labor $ 7,770 3.70
Variable manufacturing overhead $ 3,990 1.90
$ 21.80

At standard, each set of covers should require 2.50 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 variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

2. Compute the labor rate and efficiency variances for August.(Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

3. Compute the variable overhead rate and efficiency variances for August.(Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis And Security Valuation

Authors: Stephen H Penman

4th Edition

0073379662, 9780073379661

More Books

Students also viewed these Accounting questions