Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marvel Parts, Incorporated, manufactures auto accessories. One of the companys products is a set of seat covers that can be adjusted to fit nearly any

Marvel Parts, Incorporated, 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 1,005 hours each month to produce 2,010 sets of covers. The standard costs associated with this level of production are:

Total Per Set of Covers
Direct materials $ 28,542 $ 14.20
Direct labor $ 8,040 4.00
Variable manufacturing overhead (based on direct labor-hours) $ 3,618 1.80
$ 20.00

During August, the factory worked only 1,200 direct labor-hours and produced 2,600 sets of covers. The following actual costs were recorded during the month:

Total Per Set of Covers
Direct materials (6,000 yards) $ 35,100 $ 13.50
Direct labor $ 10,920 4.20
Variable manufacturing overhead $ 5,460 2.10
$ 19.80

At standard, each set of covers should require 2.0 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

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_2

Step: 3

blur-text-image_3

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

Accounting For Business

Authors: Peter Scott

2nd Edition

0198719868, 9780198719861

More Books

Students also viewed these Accounting questions

Question

How can we use language to enhance skill in perceiving?

Answered: 1 week ago