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 1,005 hours each month to produce 2,010 sets of covers. The standard costs associated with this level of production are: Total $ 28,542 $ 8,040 Per Set of Covers $14.20 4.00 Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) $ 3,618 1.80 $20.00 During August, the factory worked only 1,200 direct labor-hours and produced 2,600 sets of covers. The following actual costs were recorded during the month: Direct materials (6,000 yards) Direct labor Variable manufacturing overhead Total $ 35,100 $ 10,920 $ 5,460 Per Set of Covers $13.50 4.20 2.10 $19.80 At standard, each set of covers should require 2.0 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. (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.)

Please help me figure out variances for August!

Answer 1

7500 F 5680 U Answer Mateial Price Variance (AQ*AP)-(AQ*SP) Matrial Quanity Varaince (AQ*SP)-(SQ*SP) Labor rate Variance (AH*AR)-(AH*SR) labor Efficiency Varaince (AH*SR)-(SH*SR) Variable Overhead Rate Variance (AH*AR)-(AH*SR) Variable Overhead Efficiency Varaince (AH*SR)-(SH*SR) 1320 U 800 1140 U 360 F

L 7.10 Per Yard 2 Yards 5200 Yards 2600 Units 6000 Yards 6000 Yards 5.85 Per Yard SR Data Direct Material Standard Price(14.20/2) SP Standard quantity Per unit Standard Quantity for Actual Output SQ Actual Output Actual Quantity Purchased AQP Actual Quanity Used AQ Actual Price of Material(35100/6000) LAP Direct Labor Standard Rate(8040/1005) Standard hours per unit (1005/2010) Standard Hours for Actual output SH Actual Output Actual hours Worked AH Actual Rate (10920/1200) AR Varaible OH Standard Rate(3618/1005) Standard hours per unit (1005/2010) Standard Hours for Actual output SH Actual Output Actual hours Worked АН Actula Rate =(5460/1200) 8 Per hour 0.5 hours 1300 Hours 2600 Units 1200 hours 9.10 Per hour SR 3.60 Per hour 0.50 hours 1300 Hours 2600 Units 1200 hours 4.55 Per hour ARI