FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 uses a
| Total | Per Set of Covers | |
|---|---|---|
| Direct materials | $ 42,560 | $ 22.40 |
| Direct labor | $ 51,300 | 27.00 |
| Variable manufacturing |
$ 6,840 | 3.60 |
| $ 53.00 |
During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month:
| Total | Per Set of Covers | |
|---|---|---|
| Direct materials (12,000 yards) | $ 45,600 | $ 22.80 |
| Direct labor | $ 49,000 | 24.50 |
| Variable manufacturing overhead | $ 7,000 | 3.50 |
| $ 50.80 |
At standard, each set of covers should require 5.6 yards of material. All of the materials purchased during the month were used in production.
Required:
1.Compute the labor rate and efficiency variances for August.
2 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.)
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