Problem 10-9 Comprehensive Variance Analysis [L010-1, LO10-2, LO10-3) 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 1,030 hours each month to produce 2,060 sets of covers. The standard costs associated with this level of production are: Per Set Total of Covers Direct materials Direct labor Variable manufacturing overhead $39,140 $19.00 $ 9,270 4.50 1-70 $25.20 (based on direct labor-hours 3,502 During August, the factory worked only 640 direct labor-hours and produced 1,600 sets of covers. The following actual costs were recorded during the month: Total of Covers S29.920 $ 7,520 $4,000 Direct materials (5,500 yards) Direct labor 18.70 4-70 2.50 Variable manufacturing overhead $25.90 At standard, each set of covers should require 2.5 yards of material. All of the materials purchased during the month were used in 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 Materials quantity variance Labor efficiency variance Variable overhead efficiency variance 2. Labor rate variance 3. Variable overhead rate variance Problem 10-15 Comprehensive Variance Analysis [L010-1, L010-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below Flexible Actual Budget sales (6,000 pools) Variable expenses $240,000 $240,000 Variable cost of goods sold Variable selling expenses Total variable expenses Contribution nargin Fixed expenses 57,900 74,210 18,000 18,000 92,210 164,100 147,790 75 900 Manufacturing overhead Selling and administrative 66,000 ,000 -84,00084,000 150,000 150,000 Total fixed expenses Net operating incone (loss) $ 14,100 (2,210) Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control." Upon reviewing the plant's income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity or standard Price Standard Direct materials 3.4 pounds 2.00 per pound 6.80 2.25 0.60 Direct labor 0.3 hours 0.2 hours 7.50 per hour 3.00 per hour Variable manufacturing overhead $ 9.65 Total standard cost per unit Based on machine-hours. During June, the plant produced 6,000 pools and incurred the following costs: a. Purchased 25,400 pounds of materials at a cost of $2.45 per pound. b. Used 20,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 2,400 direct labor-hours at a cost of $7.20 per hour d. Incurred variable manufacturing overhead cost totaling $5,100 for the month. A total of 1,500 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Materials price and quantity variances. b. Labor rate and efficiency variances. C. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. Complete this question by entering your answers in the tabs below. Required 1Required 2 1a. Compute the following variances for June, materials price and quantity variances. 1b. Compute the following variances for June, labor rate and efficiency variances. 1c. Compute the following variances for June, variable overhead rate and efficiency variances. (Do not round your intermediate calculations. 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.) Show lessA 1a. Material price variance Material quantity variance Labor efficiency variance Variable overhead efficiency variance 1b. Labor rate variance 1c Variable overhead rate variance Required 1 Required 2 >