# Answered Essay: Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that ca

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 2,850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are:

 Total Per Set of Covers Direct materials \$ 42,560 \$ 22.40 Direct labor \$ 51,300 27.00 Variable manufacturing overhead (based on direct labor-hours) \$ 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 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.)

1. MATERIAL VARIANCE :

Material price variance = (standard price-actual price)actual qty

= (4-3.8)12000

Material price variance = 2400 F

Material quantity variance = (standard quantity-actual quantity)standard price

= (2000*5.6-12000)4

Material quantity variance = 3200 U

2. LABOUR VARIANCE :

Labour rate variance = (standard rate-actual rate)actual hours

= (18-17.5)2800

Labour rate variance = 1400 F

Labour efficiency variance = (standard hours-actual hours)standard rate

= (2000*1.5-2800)18

Labour efficiency variance = 3600 F

Variable overhead rate variance = (standard rate-actual rate)actual hours

= (2.40-2.50)2800

Variable overhead rate variance = 280 U

Variable overhead efficiency variance = (standrd hours-actual hours)standrd rate

= (2000*1.5-2800) 2.4

Variable overhead efficiency variance = 480 F

Working note :

standard quantity per set is given in question 5.6 per yards

standard price per yard = 22.4/5.6 = 4

standard hours per set = 2850/1900 = 1.5 hour per set

standard rate per hour = 27/1.5 = 18 per hour

standard vriable overhead rate per hour = 3.6/1.5 = 2.4 per hour

Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.