Hahahhhh Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjustedto fit nearly any small car. The company uses a standard cost system for all of its products. According to the standards that have beenset for the seat covers, the factory should work 1,040 hours each month to produce 2,080 sets of covers. The standard costsassociated with this level of production are:Direct materials.Direct laborVariable manufacturing overhead (based ondirect labor-hours)Direct materials (5,000 yards)Direct laborVariable manufacturing overheadTotal$ 40,560$7,280$ 4,160During August, the factory worked only 600 direct labor-hours and produced 1,800 sets of covers. The following actual costs wererecorded during the month:1. Materials price variance1. Materials quantity variance2. Labor rate variancePer Set ofCoversTotal$ 34,200$ 6,660$ 4,1402. Labor efficiency variance3. Variable overhead rate variance3. Variable overhead efficiency variance$19.503.502.00$ 25.00Per Set ofCovers$19.00At standard, each set of covers should require 2.5 yards of material. All of the materials purchased during the month were used inproduction.3.702.30$ 25.00Required: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., zerovariance). Input all amounts as positive values.)

Variance is a term used in budgeting. It is the difference between a budgeted or standard cost and…

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 uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,040 hours each month to produce 2,080 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) Direct materials (5,000 yards) Direct labor Variable manufacturing overhead Total $ 40,560 $7,280 $ 4,160 During August, the factory worked only 600 direct labor-hours and produced 1,800 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $19.50 3.50 Total $ 34,200 $6,660 $ 4,140 2.00 $ 25.00 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 Per Set of Covers $ 19.00 3.70 2.30 $ 25.00 At standard, each set of covers should require 2.5 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.)

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13EB: Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total...