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 2,850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 5.6 yards of material. All of the materials purchased during the month were used in production.

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).)

B)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).)

C)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).)

Work would be much appreciated please!!

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 2,850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are:

Explanation / Answer

A. Computation of materials variances for August

Materials price variances = (Standard Price - Actual Price) x Actual quantity
= {($22.40/5.6) - ($45,600/12,000)} x 12,000
= ($4.0 - $3.8) x 12,000
= $2,400 Favorable

Material quantity variance = (Standard Quantity - Actual quantity) x Standard Price
= {(5.6 x2000) -  12,000) x $4.0
= (11,200 - 12,000) x $4.0
= $4,000 Unfavorable

B. Computation of Labor variances for August

Labor rate variances = (Standard rate - Actual rate) x Actual hours
= {($17,100/2,850) - ($18,200/2,800)} x 2,800
= ($6.0 - $6.5) x 2,800
= $1,400 Unfavorable

Labor efficiency variance = (Standard hours - Actual hours) x Standard rate
= {(2,850/1900x2000) - 2,800) x $6.0
= (3,000 - 2,800) x $6.0
= $1,200 Favorable

C. Computation of Variable overhead variances for August

Variable overhead rate variances = (Standard rate - Actual rate) x Actual hours
= {($6,840/2,850) - ($7,000/2,800)} x 2,800
= ($2.4 - $2.5) x 2,800
= $280 Unfavorable

Variable overhead variance = (Standard hours - Actual hours) x Standard rate
= {(2,850/1900x2000) - 2,800) x $2.4
= (3,000 - 2,800) x $2.4
= $480 Favorable

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