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Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adju 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 ha been set for the seat covers, the factory should work 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Total $ 39,798 $ 5,940 $ 3,168 Direct materials (7,400 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 20.10 3.00 During August, the factory worked only 1,000 direct labor-hours and produced 2,200 sets of covers. The following actual costs we recorded during the month: Total $ 40,700 $ 8,140 $ 3,960 1.60 $24.70 Per Set of Covers $ 18.50 3.70 1.80 $24.00 At standard, each set of covers should require 3.0 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. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorab

Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adju 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 ha been set for the seat covers, the factory should work 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Total $ 39,798 $ 5,940 $ 3,168 Direct materials (7,400 yards) Direct labor Variable manufacturing overhead Per Set of Covers $ 20.10 3.00 During August, the factory worked only 1,000 direct labor-hours and produced 2,200 sets of covers. The following actual costs we recorded during the month: Total $ 40,700 $ 8,140 $ 3,960 1.60 $24.70 Per Set of Covers $ 18.50 3.70 1.80 $24.00 At standard, each set of covers should require 3.0 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. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorab

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
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Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjuste 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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (7,400 yards) Direct labor Variable manufacturing overhead Total $ 39,798 $5,940 $ 3,168 During August, the factory worked only 1,000 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 20.10 3.00 Total $ 40,700 $ 8,140 $ 3,960 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 1.60 $24.70 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production. Per Set of Covers $ 18.50 3.70 1.80 $24.00 Required: 1. 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. (Do not round intermediate calculations. 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.)
Transcribed Image Text:Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjuste 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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (7,400 yards) Direct labor Variable manufacturing overhead Total $ 39,798 $5,940 $ 3,168 During August, the factory worked only 1,000 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 20.10 3.00 Total $ 40,700 $ 8,140 $ 3,960 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 1.60 $24.70 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production. Per Set of Covers $ 18.50 3.70 1.80 $24.00 Required: 1. 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. (Do not round intermediate calculations. 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.)
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