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 1,000 hours each month to produce 2,000 sets of covers. The standard costs associated with this level of production are:

  

During August, the factory worked only 1,050 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 3.00 yards of material. All of the materials purchased during the month were used in production.

Required

1. Compute the materials price and quantity variances for August. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

2. Compute the labor rate and efficiency variances for August. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

3. Compute the variable overhead rate and efficiency variances for August. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

Total Per Set
of Covers Direct materials $ 41,400 $ 20.70 Direct labor $ 8,000 4.00 Variable manufacturing overhead
(based on direct labor-hours) $ 3,400 1.70 $ 26.40 Materials price variance Materials quantity variance

Explanation / Answer

Standard Actual Particulars Qty/ hours Rate amount Qty/ hours Rate amount Materials                7,200.00                        6.90                 49,680.00                7,500.00                       6.40                 48,000.00 Labour                1,200.00                    8.0000                    9,600.00                1,050.00                   9.6000                 10,080.00 Overhead                1,200.00                        3.40                    4,080.00                1,050.00                   4.8000                    5,040.00 Hours per set of covers = 1000/2000                         0.50 Standard material rate per yard = 20.70/3                         6.90 Standard labour rate per hour = 1.70/.50                         3.40 Standard V O/H rate per hour =                           4.20 Actual output                2,400.00 Materials reqd = 2400*3                7,200.00 Labour hrs reqd (2400*.50)                1,200.00 DMPV = (SP-AP)*AQ purchased DMPV = (6.90 - 6.40)7500 DMPV = 3750 F DMQV= (SQ-AQ)SP DMQV= (7200 - 7500)6.90 DMQV= 2070 U DLRV= (SR-AR)AH DLRV= (8 - 9.6)1050 DLRV= 1680U DLEV = (SH-AH)SR DLEV = (1200 - 1050)8 DLEV = 1200 F VORV = (SR-AR)AH VORV = (3.4 - 4.8)1050 VORV = 1470 U VOEV = (SH-AH)SR VOEV = (1200 - 1050)3.4 VOEV = 510 F

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

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