Question

EXAM 4 (FINAL)-CH 8, 9, 10 6 Help Marvel Parts, Inc., manufactures auto a neary 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 1,000 hours each month to produce 2,000 sets of covers. The standard costs $ 41,400 $20.70 8,0004.00 Direct s 3,400 1.70 $26.40 on direct labor-hours) During August, the factory worked only 1,050 direct labor hours and produced 2400 sets of covers. The following actual costs recorded during the month: 5 48,000 $20.00 10,080 4.20 5,0402.10 $26.30 overhend 10.0. Direct labor At standard, each set of covers should require 3.0 yards of material All of the materials purchased during the month were used in 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" variance. Input all amounts ?s positive values.) for no effect (I.e., zero Prev28 of 28 N

Answer 1

Answer for 1)

Material price variance:

(Standard price-Actual price)×actual quantity

=($20.7-$20)×7500 yards

=$5250 F

Material quantity varVaria:

(Standard quantity-Actual quantity)×standard price

=((3 yards×2400 units)-7500 yards)×$20.7

=$6210 U

Answer for 2)

Labour rate Variance:

(Standard rate-actual rate)×actual hour

($4-$4.2)×1050 hours

=$210 U

Labour efficiency variance:

(Standard hours-actual hours)×standard rate

((1000 hours/2000 units×2400 units)-1050 hours)×$4

(1200 hours-1050 house)×$4

=$600 F

Answer for 3)

Variable overhead rate Variance:

(Standard rate-actual rate)×actual hours

($1.7-$2.1)×1050 hours

$420 U

Variable overhead efficiency variance:

(Standard hours-actual hours)×standard rate

(1200 hours-1050 hours)×$1.7

=$255 F