Standard Costs and Variances connect Pro OBLEM 10-9 Coma Manel Parts, Inc., man covers that can be ad Er all of its products should work 2.850 comprehensive Variance Analysis LO10-1, LO10-2 LO10-3 manufactures auto accessories. One of the company's products is a set of scal he adjusted to hit nearly any small car. The company uses a standard cost system ducts. According to the standards that have been set for the seat covers, the factory 850 hours each month to produce 1.900 sets of covers The standard costs associated this level of production are: Direct materials ........ Direct labor......... Variable manufacturing overhead (based on direct labor-hours) ... Total $42,560 $51,300 Per Set of Covers $22.40 27.00 $6,840 3.60 $53.00 During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of cov. ers. The following actual costs were recorded during the month: Direct materials (12,000 yards)....... Direct labor... Variable manufacturing overhead ....... Total $45,600 $49.000 $7,000 Per Set of Covers $22.80 24.50 3.50 $50.80 At standard, each set of covers should require 5.6 yards of material. All of the materials purchased during the month were used in production. Required: Compute the following variances for August: 1. The materials price and quantity variances. - The labor rate and efficiency variances. The variable overhead rate and efficiency variances. 101 1010-2