10 Homework Help Save& Exilt Submit Check my work Problem 10-9 Comprehensive Var

Question

10 Homework Help Save& Exilt Submit Check my work Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3 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 Total of Covers 41.400 $20.70 ,00 .00 Variable nanufacturing overhead (based hours 3,400 1.70 $26.40 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: Direot naterials 7,500 yards) 48.000 20 10.00.20 5.0402-0 526.30 Variable manafaeturing overhead At standard, each set of covers should require 3.0 yards of material. All of the materials purchased duning the month were used in , Compute the materials price and quantity variances for August 2. Compute the labor rate and efficiency variances for August 3. Compute the variable overhead rate and efficiency variances for August Prev 4f 4 Next 20p 3 5 6 WE R

Explanation / Answer

Standard rate 6.9 Per yard (41400/6000) 1 Actual rate 6.4 Per yard (48000/7500) Direct material price variance = (Standard rate - Actual rate) * Actual quantity Direct material price variance = (6.9-6.4) * 7500. Direct material price variance = 3750 Favorable 2 Standard Material for actual production 2400*3 7,200 Micron Direct material quantity variance=   ( Actual material - Standard material for acual production) *Standard rate Direct material quantity variance=   (7500-7200)* 6.9 2070 UnFavorable 3 Actual rate 9.60 per hour (10080/1050) Labor rate variance = (Actual rate -Standard rate) * Actual hours Labor rate variance = (9.60-8) * 1050 1680 unFavorable 4 Standard labor hours for actual production 2400*.5 1,200 Hours Labor Effeciency variance= (Standard hours for acual production -Actual hours) *Standard rate Labor Effeciency variance= (1200-1050)* 8 1200 Favorable 5 Actual rate 4.80 per hour (5040/1050) Variable overhead rate variance = (Actual rate -Standard rate) * Actual hours Variable overhead rate variance = (4.8-3.4) * 1050 1470 UnFavorable 6 Standard labor hours for actual production 2400*.5 1,200 Hours Variable OH Effeciency variance=   (Standard hours for acual production -Actual hours) *Standard rate Variable OH Effeciency variance=   (1200-1050)* 3.4 510 Favorable

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