ezto.mheducation.com 12.00 points Marvel Parts, Inc., manufactures auto accessor
ID: 2481013 • Letter: E
Question
ezto.mheducation.com 12.00 points Marvel Parts, Inc., manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearty any small car. The company has a standard cost system in use for all of ts products. According to the standards that have been 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: Per Set Total of Covers Direct materials Direct labor $45,738 $23.10 $6,930 3.50 3,168 160 $28.20 Variable manufacturing overhead (based on direct labor-hours) During August, the factory worked only 1,000 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month: Per Set of Covers Total Direct materials (10,000 yards) Direct labor Variable manufacturing overheacd $56,000 $22.40 S 9,250 3.70 S 4,500 1.80 4,500 $27.90 At standard, each set of covers should require 3.30 yards of material. All of the materials purchased during the month were used in production 1. Compute the materials price and quantity variances for August. (Indicate the offect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no affect (l.e., zero variance) Round your intermediate calculations to 2 decimal places Round "Standard Price" and "Actual Price" answers to 2 decinal places.) Actual Quantity x Actual Price - Standard Price Variance Materials price variance Standard Price x Actual Quantity -Standard Quan5ty ·I Variance Materials quantity variance o UExplanation / Answer
Standard price => 45738 / (1980 *3.3) => $ 7
Actual Price => 56000 / 10000 => $5.6
Material price VAriance => (SP - AP) AQ
=> ( 7 - 5.6) *10000
=> $14000F
Matrerial Quantity variance => (SQ - AQ) * SP
=> ((2500 * 3.30) - 10000) * 7
=>$ 12250 UF
Answer 2
Labor Rate Variance => (SR - AR ) *AH
=> [ (6930 / 990) - (9250 / 1000) ] * 1000
=> (7 - 9.25) * 1000
=>$ 2250 UF
Labour effeciency variance => (SH - AH) * SR
=>( ( 2500 * 2#) - 1000) * 7
=> $28000 F
# => per standard hour to make single unit => 1980/990 => 2 hrs per unit.
Answer 3
VAriable Rate Variance => (SR - AR ) *AH
=> [ (3168/990) - (4500 / 1000) * 1000
=> (3.2 - 4.5) *1000
=> $1300 UF
Variable Effeciency Variance => (SH - AH) * SR
=> (( 2500 * 2#) - 1000) * 3.2
=> $12800 F
# => per standard hour to make single unit => 1980/990 => 2 hrs per unit.
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