Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] 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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are Per Set Total of Covers Direct materials Direct labor Variable manufacturing overhead $39,798 $20.10 $ 5,940 3.00 3,1681.60 $24.70 (based on direct labor-hours) 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 $ 40,700 $18.50 3,960 1.80 $24.00 Total of Covers Direct materials (7,400 yards) Direct labor $ 8,140 3.7 Variable manufacturing overhead At standard, each set of covers should require 3.00 yards of material. All of the materials purchased during the month were used in production
Show transcribed image textProblem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] 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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are Per Set Total of Covers Direct materials Direct labor Variable manufacturing overhead $39,798 $20.10 $ 5,940 3.00 3,1681.60 $24.70 (based on direct labor-hours) 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 $ 40,700 $18.50 3,960 1.80 $24.00 Total of Covers Direct materials (7,400 yards) Direct labor $ 8,140 3.7 Variable manufacturing overhead At standard, each set of covers should require 3.00 yards of material. All of the materials purchased during the month were used in production
Marvel Parts, Inc., manufactures auto accessories. One of thecompanyâs products is a set of seat covers that can be adjusted tofit nearly any small car. The company has a standard cost system inuse for all of its products. According to the standards that havebeen set for the seat covers, the factory should work 980 hourseach month to produce 1,960 sets of covers. The standard costsassociated with this level of production are:
Total
PerSet of Covers
Direct materials
$
32,340
$
16.50
Direct labor
$
6,860
3.50
Variablemanufacturing overhead (based on direct labor-hours)
$
1,960
1.00
$
21.00
During August, the factory worked only 1,000 direct labor-hoursand produced 2,100 sets of covers. The following actual costs wererecorded during the month:
Total
PerSet of Covers
Direct materials (6,000 yards)
$
34,020
$
16.20
Direct labor
$
7,770
3.70
Variable manufacturingoverhead
$
3,990
1.90
$
21.80
At standard, each set of covers should require 2.50 yards ofmaterial. All of the materials purchased during the month were usedin production.
Required:
1.
Compute the materials price and quantity variances for August.(Input all amounts as positive values. Indicate the effectof each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
2.
Compute the labor rate and efficiency variances for August.(Input all amounts as positive values. Indicate the effectof each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
3.
Compute the variable overhead rate and efficiency variances forAugust. (Input all amounts as positive values. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zerovariance).)
Variable manufacturingoverhead (based on direct labor-hours)
$
2,388
1.20
$
29.50
During August, the factory worked only 1,000 direct labor-hoursand produced 2,300 sets of covers. The following actual costs wererecorded during the month:
Total
PerSet of Covers
Direct materials(8,800 yards)
$
50,600
$
22.00
Direct labor
$
10,580
4.60
Variable manufacturingoverhead
$
4,600
2.00
$
28.60
At standard, each set of covers should require 3.50 yards ofmaterial. All of the materials purchased during the month were usedin production.
Required
1. Compute the materials price and quantity variances forAugust.
2. Compute the labor rate and efficiency variances forAugust.
3. Compute the variable overhead rate and efficiency variancesfor August.
