Question

Ch. 10: Homework A Saved Help Save & Exit Check my 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 1,070 hours each month to produce 2,140 sets of covers. The standard costs associated with this level of production are: points Skipped Total $ 26,964 $ 11,770 Per Set of Covers $12.60 5.50 Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) $ 3,638 1.70 $19.80 eBook References During August, the factory worked only 1,000 direct labor-hours and produced 2,400 sets of covers. The following actual costs were recorded during the month: Direct materials (6,000 yards) Direct labor Variable manufacturing overhead Total $ 29, 280 $ 13,680 $ 5,760 Per Set of Covers $12.20 5.70 2.40 $20.30 At standard, each set of covers should require 1.5 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.) 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance 3. Variable overhead rate variance Variable overhead efficiency variance

Answer 1

21120F 20160 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) 2680 U 2200 F 2360 U 680 F

8.40 Per Yard 1.5 Yards 3600 Yards 2400 Units 6000 Yards 6000 Yards 4.88 Per Yard Direct Material Standard Price (12.6/1.5) 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(29280/6000) AP Direct Labor Standard Rate(11770/1070) SR Standard hours per unit (1070/2140) Standard Hours for Actual output SH Actual Output Actual hours Worked Actual Rate (13680/1000) Varaible OH Standard Rate(3638/1070) SR Standard hours per unit (1070/2140) Standard Hours for Actual output Actual Output Actual hours Worked Actula Rate =(5760/1000) 11 Per hour 0.5 hours 1200 Hours 2400 Units 1000 hours 13.68 Per hour AH AR SH 3.40 Per hour 0.50 hours 1200 Hours 2400 Units 1000 hours 5.76 Per hour AH AR