Problem 10-9 (Algo) Comprehensive Variance Analysis (L010-1, LO10-2, LO10-3) 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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Per Set Total of Covers $ 39,798 $20.10 $ 5,940 3.00 $ 3,168 1.60 $24.70 During August, the factory worked only 1,000 direct labor-hours and produced 2,200 sets of covers. The following actual costs were recorded during the month: Per Set Total of Covers Direct materials (7,400 yards) $40,700 $18.50 $ 8,140 3.70 Variable manufacturing overhead $ 3,960 1.80 $24.00 At standard, each set of covers should require 3.0 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 Exercise 11-9 (Algo) Return on Investment (ROI) and Residual Income Relations (L011-1, LO11-2) A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry, Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent.) Company B $ 7,950,000 $ 344,000 $ 9,570,000 $ 5,355,000 $ 2.142.000 $ 3.190,000 15 % 20% Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income 13 % 19% $ 309,600 $ 107,100 DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations. Month 3 Throughput time (days) ? 7 2 2 Delivery cycle time (days) ? ? 7 ? Manufacturing cycle efficiency (MCE) ? 2 7 ? Percentage of on-time deliveries 794 754 724 69 Total sales (units) 2790 2671 2534 2438 COS Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months Average per Month (in days) 1 2 3 Move time per unit 0.9 2.6 0.7 0.7 Process time per unit 3.9 3.7 3.5 Wait time per order before start of production 3.3 24.0 26.3 29. 31.4 Queue tine per unit 5.4 6.1 Inspection time per unit 6.9 0.5 0.6 0.6 0.5 Required: 1-a. Compute the throughput time for each month. 1b. Compute the delivery cycle time for each month. 1-c. Compute the manufacturing cycle efficiency (MCE) for each month 2. Evaluate the company's performance over the last four months. 3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE 3.b. Refer to the move time, process time, and so forth, given for month 4 Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4. except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE