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 1,075 hours each month produce 2,150 sets of covers. The standard costs associated with this level of production are: 99 Direct materials Direct labor Variable manufacturing ove on direct labor-hours) (based During August, the factory recorded during the month: only 800 direct labor-hours and produced covers. The following actual costs were ards) Direct materials (12,500 Direct labor Variable manufacturing over! At standard, each set of covers production. 8893 purchased during the month were used in 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.) 1 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance 3. Variable overhead rate variance Variable overhead efficiency variance TI

Answer 1

47500 42500 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 (AHAR)-(AH*SR) Variable Overhead Efficiency Varaince (AH*SR)-(SH*SR) 5000 U 4500F 3000 U 2250 F

SQ 8.50 Per Yard 3 Yards 7500 Yards 2500 Units 12500 Yards 12500 Yards 4.70 Per Yard SR Direct Material Standard Price (25.5/3) SP Standard quantity Per unit Standard Quantity for Actual Output Actual Output Actual Quantity Purchased AQP Actual Quanity Used AQ Actual Price of Material(58750/12500) | AP Direct Labor Standard Rate(10750/1075) Standard hours per unit (1075/2150) Standard Hours for Actual output Actual Output Actual hours Worked AH Actual Rate ((13000/800) Varaible OH Standard Rate(5375/1075) SR Standard hours per unit (1075/2150) Standard Hours for Actual output SH Actual Output Actual hours Worked Actula Rate =(7000/800) AR SH 10 Per hour 0.5 hours 1250 Hours 2500 Units 800 hours 16.25 Per hour AR 5.00 Per hour 0.50 hours 1250 Hours 2500 Units 800 hours 8.75 Per hour AH