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 980 hours each month to produce 1,960 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 $32,340 $16.50 $ 6,860 3.50 $ 1,960 1.00 $21.00 (based on direct labor-hours) 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: Per Set $34,020 $16.20 $ 3,990 1.90 $21.80 Total of Covers Direct materials (6,000 yards) Direct labor $ 7,770 3.7 Variable manufacturing overhead At standard, each set of covers should require 2.50 yards of material. All of the materials purchased during the month were used in production

Explanation / Answer

Marvel Parts Inc. Standard Hours 980 Hours Standard Production 1960 Sets Each set of seat cover required 2.5 Yards Total Per set of Covers Direct Material $ 32,340.00 $                   16.50 Direct Labor $    6,860.00 $                      3.50 Variable Manufacturing Overhead (Based on Direct Labor Hours) $    1,960.00 $                      1.00 $                   21.00 Actual Hours $    1,000.00 Hours Actual Production 2100 Sets Total Per Set of Covers Direct Material(6000 Yards) $ 34,020.00 $                   16.20 Direct Labor $    7,770.00 $                      3.70 Variable Manufacturing Overhead $    3,990.00 $                      1.90 (Based on Direct Labor Hours) $                   21.80 The standard rate per hour of direct labor is $            7.00 The Standard direct labor hours allowed per unit of output 2 Hours The Standard Price per yards for material is $            6.60 Direct Material Quantity Variance=SP(AQ-SQ) SQ= 5250 AQ= 6000 SP= $            6.60 Direct Material Quantity Variance= $    4,950.00 (U) Material Price Variance=AQ(AP-SP) AQ= 6000 SP= $            6.60 Material Price Variance= ($5,580.00) (F) Direct Labor Efficiency Variance=SR(AH-SH) Direct Labor Efficiency Variance= $        140.00 (U) Direct Labor Rate Variance=AH(AR-SR) $        770.00 (U) Varable Overhead Efficiency Variance=SR(AH-SH) $          40.00 (U) Variable Overhead Rate Variance=AH(AR-SR) $    1,990.00 (U)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

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