Marvel Parts. Inc., manufactures auto accessories. One of the company\'s product

Question

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 1,070 hours each month to produce 2,140 sets of covers. The standard costs associated with this level of production are: During August, the factory worked only 1,000 direct labor-hours and produced 2.400 sets of covers. The following actual costs were recorded during the month: At standard, each set of covers should require 1.50 yards of material. All of the materials purchased during the month were used in production. Required: Compute the materials price and quantity 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). Round your intermediate calculations to 2 decimal places. Round "Standard Price" and "Actual Price" answers to 2 decimal places.)

Explanation / Answer

Direct material price variance = ( standard price - Actual price) * actual quantity                    = ( 12.6 - 12.2 )*6000                    = 0.4 * 6000                     = 2400 F Direct material quantity variance = ( standard quantity - actual quantity) * standard price      = ( 1.5*2140 - 6000) * 12.6/1.5      = ( 3210-6000) *8.4      = -2790 * 8.4       = -23436 UF

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.