AL) , CH 8, 9, 10 Marvel Parts, Inc, manufactures auto accessories One of the co

Question

AL) , CH 8, 9, 10 Marvel Parts, Inc, manufactures auto accessories One of the company's products is a set of seat covers that can be adjusted to nearly any small car. The company has a standa set for the seat covers, the factory should work 990 hours each month to produce 1.980 sets of covers. The standard costs associated with this level of production are; rd cost system in use for all of its products. According to the standards that have been Per Set Total of Covers 39,798 $20.1 Direct materials Direct labor Variable manufacturing overhead (based on $ 5,940 3.00 direct labor-hours) 3,1681.60 $24.70 During August, the factory worked only 1,000 direct labor-hours and produced 2.200 sets of covers. The following actual costs were recorded during the month Per Set Total of Covers Direct materials (7,400 yards) Direct labor 48,788 $18.58 8,140 3-78 $3,9681.88 $24.00 Variable manufacturing overhead At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production. Required: K Prev 28 of 28 Next nloads 3 Entry Level FinancialEXAM 4 (FINAL)- CH.AVG AntiVirus

Explanation / Answer

Std material qty allowed for actual output (2200*3): 6600 Std price per yard (20.1/3): 6.70 Actual Quantity allowed: 7400 yards Actual price per yard (40700/7400): 5.5 per yard Material Price variance: Actual Qty (Std price-Actual pricce) 7400 (6.70-5.50) = $ 8880 Fav Material Quantity Variance: Std price (Std quantity-Actual Quantity) 6.70 (6600-7400)= 5360 Unfavorable Std labour hours allowed for actual output (2200*0.50): 1100 hours Std rate per hour: $ 6.00 per hour Actual hours: 1000 hours Actual Rate per hour (8140/1000): $ 8.14 per hour Labour rate variance: Actual hours (Std rate-Actual rate) 1000 (6.00-8.14)= $ 2140 Unfavorable Labour efficiency variance: Std rate (Std hours-Actual hours) 6.00 (1100-1000)= $ 600 favorable Std variable OH rate per hour: 3.20 per hour Actual variable Ohh rate pr hour (3960/1000): 3.96 per hor Variable OH rate variance: Actual hours (Std OH rate-Actual OH rate) 1000 (3.20-3.96) = 760 Unfavvorable Variabble OH efficiency variance: Std OH rate (Std hours-Actual Hours) 3.20 (1100-1000)= $ 320 Fav

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