Problem 10-9 Comprehensive Variance Analysis [L010-1, LO10-2, LO10-3] Marvel Par

Question

Problem 10-9 Comprehensive Variance Analysis [L010-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessorles. 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 1,035 hours each month to produce 2,070 sets of covers. The standard costs assoclated with this level of production are Per Set Total of Covers Direct materials Direct labor Variable manufacturing overhead (based S 31,87B $15.40 $ 6,210 3.00 2.10 $20.50 on direct labor-hours) 4,347 During August, the factory worked only 500 direct labor-hours and produced 1,700 sets of covers. The following actual costs were recorded during the month: Per Set Total of Covers Direct materials (5,000 yards) Direct labor 25,500 $15.00 3.20 $4,0802.40 $20.60 $ 5,440 Variable manufacturing overhead At standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used in production. Requirec 1. Compute the materials price and quantity varlances for August. 2. Compute the labor rate and efficlency varlances for August. 3. Compute the varlable 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). Input all amounts as positive values.) 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance 3. Variable overhead rate variance Variable overhead efficiency variance

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Standard Actual Particulars Qty/ hours Rate amount Qty/ hours Rate amount Materials              3,400.00                      7.70            26,180.00              5,000.00                      5.10            25,500.00 Labour                  850.00                  6.0000              5,100.00                  500.00               10.8800              5,440.00 Overhead                  850.00                      4.20              3,570.00                  500.00                  8.1600              4,080.00 Hours per set of covers = 1035/2070                      0.50 Standard material rate per yard = 15.40/2                      7.70 Standard labour rate per hour = 3/.50                      6.00 Standard V O/H rate per hour = 2.1/.50                      4.20 Actual output              1,700.00 Materials reqd = 1700*2              3,400.00 Labour hrs reqd (1700*.50)                  850.00 DMPV = (SP-AP)*AQ purchased DMPV = (7.70 - 5.10)5000 DMPV = 13,000 F DMQV= (SQ-AQ)SP DMQV= (3400 - 5000)7.70 DMQV= 12,320U DLRV= (SR-AR)AH DLRV= (6 - 10.88)500 DLRV= 2440U DLEV = (SH-AH)SR DLEV = (850 - 500)6 DLEV = 2100 F VORV = (SR-AR)AH VORV = (4.2 - 8.16)500 VORV = 1980 U VOEV = (SH-AH)SR VOEV = (850 - 500)4.2 VOEV = 1470 F

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