Question

In: Accounting

Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessories. One of...

Problem 10-9 Comprehensive Variance Analysis [LO10-1, 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 1,070 hours each month to produce 2,140 sets of covers. The standard costs associated with this level of production are:

Total Per Set
of Covers
Direct materials $ 26,964 $ 12.60
Direct labor $ 11,770 5.50
Variable manufacturing overhead (based on direct labor-hours) $ 3,638 1.70
$ 19.80

During August, the factory worked only 1,000 direct labor-hours and produced 2,400 sets of covers. The following actual costs were recorded during the month:

Total Per Set
of Covers
Direct materials (6,000 yards) $ 29,280 $ 12.20
Direct labor $ 13,680 5.70
Variable manufacturing overhead $ 5,760 2.40
$ 20.30

At standard, each set of covers should require 1.5 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.)

Solutions

Expert Solution

1,2,&3.

Calculate the required variances as follows:

Above figures have been calculated in the following manner:


Related Solutions

Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessories. One of...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, 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 1,005 hours each month to produce 2,010 sets of covers. The standard costs associated with...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessories. One of...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, 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 1,045 hours each month to produce 2,090 sets of covers. The standard costs associated with...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessories. One of...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, 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...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Marvel Parts, Inc., manufactures auto accessories. One of...
Problem 10-9 Comprehensive Variance Analysis [LO10-1, 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 1,010 hours each month to produce 2,020 sets of covers. The standard costs associated with...
Problem 8-24A Comprehensive Variance Analysis [LO8-4, LO8-5, LO8-6] Marvel Parts, Inc., manufactures auto accessories. One of...
Problem 8-24A Comprehensive Variance Analysis [LO8-4, LO8-5, LO8-6] 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 980 hours each month to produce 1,960 sets of covers. The standard costs associated with...
9. Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of...
9. 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 980 hours each month to produce 1,960 sets of covers. The standard costs associated with this level of production are: Total Per...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (4,000 pools) $ 210,000 $ 210,000 Variable expenses: Variable cost of goods sold* 50,680 63,710 Variable selling expenses 12,000 12,000 Total variable expenses 62,680 75,710 Contribution margin 147,320 134,290 Fixed expenses: Manufacturing overhead 61,000 61,000 Selling and administrative 76,000 76,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (6,000 pools) $ 240,000 $ 240,000 Variable expenses: Variable cost of goods sold* 57,900 74,210 Variable selling expenses 18,000 18,000 Total variable expenses 75,900 92,210 Contribution margin 164,100 147,790 Fixed expenses: Manufacturing overhead 66,000 66,000 Selling and administrative 84,000 84,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (7,000 pools) $ 255,000 $ 255,000 Variable expenses: Variable cost of goods sold* 85,400 104,590 Variable selling expenses 15,000 15,000 Total variable expenses 100,400 119,590 Contribution margin 154,600 135,410 Fixed expenses: Manufacturing overhead 64,000 64,000 Selling and administrative 79,000 79,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (3,000 pools) $ 179,000 $ 179,000 Variable expenses: Variable cost of goods sold* 33,390 44,540 Variable selling expenses 11,000 11,000 Total variable expenses 44,390 55,540 Contribution margin 134,610 123,460 Fixed expenses: Manufacturing overhead 50,000 50,000 Selling and administrative 75,000 75,000...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT