Chapter $10$ Homework

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Marvel Parts, Incorporated, 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

$1\mathrm{.}2$

associated with this level of production are:

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$\backslash$table$[[,$Total,$\backslash$table$[[$Per Set of$],[$Covers$]]],[$Direct materials,$$26,964,$$$12\mathrm{.}60],[$Direct labor,$$11,770,5\mathrm{.}50],[\backslash$table$[[$Variable manufacturing overhead $($based$],[$on direct labor$-$hours$)]],$$$3,638,1\mathrm{.}70]]$

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:

$\backslash$table$[[,$Total,Per Set of$],[$Covers$,,]]$

References

At standard, each set of covers should require $1\mathrm{.}5$ yards of material. All of the materials purchased during the month were used in production.

Required:

Compute the materials price and quantity variances for August.

Compute the labor rate and efficiency variances for August.

Compute the variable overhead rate and efficiency variances for August.

$($Do not round intermediate calculations. 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.$)$

$\backslash$table$[[1.$ Materials price variance,,$],[1.$ Materials quantity variance,,$],[2.$ Labor rate variance,,$],[2.$ Labor efficiency variance,,$],[3.$ Variable overhead rate variance,,$],[3.$ Variable overhead efficiency variance,,$]]$

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NextMarvel Parts, Incorporated, 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:

Total Per Set of Covers

Direct materials $ $26,964$ $ $12\mathrm{.}60$

Direct labor $ $11,7705\mathrm{.}50$

Variable manufacturing overhead $($based on direct labor$-$hours$)$ $ $3,6381\mathrm{.}70$

$ $19\mathrm{.}80$

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:

Total Per Set of Covers

Direct materials $(6,000$ yards$)$ $ $29,280$ $ $12\mathrm{.}20$

Direct labor $ $13,6805\mathrm{.}70$

Variable manufacturing overhead $ $5,7602\mathrm{.}40$

$ $20\mathrm{.}30$

At standard, each set of covers should require $1\mathrm{.}5$ 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.