C Secure I https://newconnectmsheducation.com/fkw/connect.html Ch. 10: Homework
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C Secure I https://newconnectmsheducation.com/fkw/connect.html Ch. 10: Homework Help Save& Exit Submi Check my work 1 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 1030 hours each month to produce 2,060 sets of covers. The standard costs 375 associated with this level of production are Total l of Covers 39.146 $19.0 Direct materials Direct labor Varlable senufecturing overhead (based on 9,278 4.se direct labor-hours) 3,52 il1.2 References $25.20 During August, the factory worked only 640 direct labor-hours and produced 1,600 sets of covers. The following actual costs were recorded during the month Covers $ 29,920 $18.70 7,5204.70 4,000 2.0 $25.90 oirect materials (5,500 yarnds) Direct labor At standard, each set of covers should require 2 5 yards of material All of the matenials purchased during the month were used in production in 1 1 of 4 Next > 6:54 Type here to searchExplanation / Answer
1. Material price variance = actual quantity * actual price - actual quantity*standard price
Actual quantity = 5500 yards. Actual price = 29920/5500 = 5.44
Thus material price variance = 5500*5.44 - 5500*(39140/(2060*2.5)) = 29920 - 41800 = 11,880 favorable
Materials quantity variance = standard price*(actual quantity - standard quantity)
standard price = 39140/(2060*2.5) = 7.60. Actual quantity = 5500 yards. Standard quantity = 1600*2.5 = 4000
Thus variance = 7.60*(5500-4000) = 11400 unfavorable
2. Labor rate variance = actual hours*(actual rate - standard rate) = 640*(7520/640 - 9270/1030) = 640*(11.75 - 9) = 1760 unfavorable
Labor efficiency variance = standard rate*(actual hours - standard hours) 9*(640 - (1030/2060*1600) = 9*(640-800)
= 1440 favorable
3. Variable overhead variance = actual hours*(actual rate - standard rate) = 640*(4000/640 - (3502/1030)) = 640*(6.25 - 3.4) = 1824 unfavorable
variable overhead efficiency variance = standard rate*(actual hours - standard hours) = 3.4*(640-800) = 544 favorable
1 Materials price variance 11,880.00 F Materials quantity variance 11,400.00 U 2 Labor rate variance 1,760.00 U Labor efficiency variance 1,440.00 F 3 Variable overhead rate variance 1,824.00 U Variable overhead efficiency variance 544.00 FRelated Questions
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