Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjustedto fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that havebeen set for the seat covers, the factory should work 980 hours each month to produce 1.960 sets of covers. The standard costsassociated with this level of production are:Per Set ofCovers$ 16.503.50TotalDirect materialsDirect laborVarlable manufacturing overhead (based ondirect labor-hours)$ 32,340$ 6,860$ 1,401.00$ 21.00During August, the factory worked only 1,000 direct labor-hours and produced 2100 sets of covers. The following actual costs wererecorded during the month:Per Set ofTotalCoversDirect materlals (6,000 yards)Direct laborVariable manufacturing overhead$ 34,020$7,770$3,990$ 16.203.701.90$ 21.00At standard, each set of covers should require 25 yards of material. All of the materials purchased during the month were used inproduction.Required:1. Compute the materials price and quantity variances for August.2 Compute the labor rate and efficiency variances for August3. Compute the variable overhead rate and efficiency variances for August.(Indicate the effect of eech verience by selecting "F for favoreble, "U" for unfavoreble, and "None" for no effect (Le., zerovariance). Input all amounts as positive values.)1. Materials price variance4.950u1. Materials quantity varlance2. Labor rate varlance770U3502. Labor efficiency variance3. Variable overhead rate variance3. Variable overhead efficiency varlance

Marvel Parts, Incorporated, 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 980 hours each month to produce 1.960 sets of covers. The standard costs associated with this level of production are: Per Set of Covers $ 16.50 3.50 Total Direct materials Direct labor Varlable manufacturing overhead (based on direct laboe hours) $ 32,340 $6,860 $1,960 1.00 $ 21.00 During August, the factory worked only 1,000 direct labor-hours and produced 2100 sets of covers. The following actual costs were recorded during the month: Per Set of Total Covers Direct materlals (6,000 yards) Direct labor $34,020 $7,770 $3,990 $ 16.20 3.70 1.90 $ 21.80 Variable manufacturing overhead At standard, each set of covers should require 25 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. (Indicate the effect of each veriance by selecting "F for favoreble, "U" for unfavorable, and "None" for no effect (Le, zero varience). Input all emounts as positive values) 1. Materials price variance 4,950u 770U 350 1. Materials quandity varlance 12. Labor rate varlance 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency varlance

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...