Marvel Parts, Inc., manufactures auto accessories. One of the company’s products

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 1,055 hours each month to produce 2,110 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 2,100 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 3.00 yards of material. All of the materials purchased during the month were used in production.

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.)

Compute the labor 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). Round your intermediate calculations to 2 decimal places. Round "Standard Rate" and "Actual Rate" answers to 2 decimal places.)

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). Round your intermediate calculations to 2 decimal places. Round "Standard Rate" and "Actual Rate" answers to 2 decimal places.)

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 1,055 hours each month to produce 2,110 sets of covers. The standard costs associated with this level of production are:

Explanation / Answer

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials              6,300.00                      8.10            51,030.00              6,800.00                  7.3500            49,980.00 Labour              1,050.00               10.0000            10,500.00              1,000.00               10.9200            10,920.00 Overhead              1,050.00                      4.60              4,830.00              1,000.00                  5.4600              5,460.00 Actual output              2,100.00 Materials reqd(2100*3)              6,300.00 Labour hrs reqd(2100*.5)              1,050.00 DMPV = (SP-AP)*AQ DMPV = (8.10 - 7.35)6800 DMPV = 5,100 F DMQV= (SQ-AQ)SP DMQV= (6,300 - 6,800)8.10 DMQV= 4,050 U DLRV= (SR-AR)AH DLRV= (10 - 10.92)1,000 DLRV= 920 U DLEV = (SH-AH)SR DLEV = (1,050 - 1,000)10 DLEV = 500 F VORV = (SR-AR)AH VORV = (4.60 - 5.46)1,000 VORV = 860U VOEV = (SH-AH)SR VOEV = (1,050 - 1,000)4.60 VOEV = 230 F

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