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 uses a standard cost system 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: Total Per Set of Covers Direct materials $ 42,560 $ 22.40 Direct labor $ 51,300 27.00 Variable manufacturing overhead (based on direct labor-hours) $ 6,840 3.60 $ 53.00 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: Total Per Set of Covers Direct materials (12,000 yards) $ 45,600 $ 22.80 Direct labor $ 49,000 24.50 Variable manufacturing overhead $ 7,000 3.50 $ 50.80 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. 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.

Community Answer

Honor CodeSolved 1 Answer

See More Answers for FREE

Enhance your learning with StudyX

Receive support from our dedicated community users and experts

See up to 20 answers per week for free

Experience reliable customer service

Get Started

(1)Mataid price raniance = (Actual arantity x stondard ples)(Actual quartity x Actual pika)\begin{array}{l}=(12000 \times 4)-(12000 \times 3.8) \\=2400(F)\end{array}Nota:- standard prou= standand mataid cort/ stondard quantity\begin{array}{l}=42,560 /(1900 \times 5.6) \\=\$ 4 / \text { yand }\end{array}Actual pricu= Actual matuial cost/Actual material arantity)\begin{array}{l}=45600 / 12000 \\=\$ 3.8 \text { lyand }\end{array}Materid quentily vaniance =(stondand quartity allened - Actud quartity) \times standact piou\begin{array}{l}=((5.6 \times 2,000)-12000) \times 4 \\=(11,200-12000) \times 4 \\=\$ 3,200(\mathrm{U})\end{array}(2)\text { labour rate variance }=\text { Actual hours } \times(\text { standant rate }- \text { Actuel rate) }\begin{array}{l}=2800 \times((17100 / 2850)-(18200 / 2800)) \\=2800 \times(6-6.5) \\=\$ 1,400(\mathrm{u})\end{array}lobour efficiency raniancus standact rate \times (standaid hown-Actual hours)\begin{array}{l}=6 \times(3000-2800) \\=\$ 1,200(F)\end{array}Scanned by TapScanner(3)Oreshead rate varianceACNal labour houux (Stondald rate-Actud rate)\begin{array}{l}=2800 \times((6840 / 2850)-(7000 / 2800)) \\=\$ 280(u)\end{array}Varicbl owhead efficiong raviance\begin{array}{l}=\text { stondald rate } \times \text { (stondact hour - Actual houy) } \\=2.40 \times(3000-2800) \\=\$ 480(\mathrm{f})\end{array}Scanned by TapScanner ...