Marvel Parts Inc manufactures auto accessories One of the co

Marvel Parts, Inc., manufactures auto accessories. One of the companys 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 1,030 hours each month to produce 2,060 sets of covers. The standard costs associated with this level of production are: Direat 39,140 $19.00 9,270 4.50 S 3.5021.70 25.20 on direct labor-hours) During August, the factory worked only 640 direct labor-hours and produced 1,600 sets of covers. The following actual costs were recorded during the month: Total of Covers $29,920 $18.70 $ 7,520 4.70 $ 4,000 2.50 Variable manufacturing overhead At standard, each set of covers should require 2.5 yards of material. All of the lals purchased during the month were used in 1. Compute the materials price and quantity variances for August

Solution

Working:

1	Materials price variance	$11880	F
	Materials quantity variance	$11400	U
2	Labor rate variance	$1760	U
	Labor efficiency variance	$1440	F
3	Variable overhead rate variance	$1824	U
	Variable overhead efficiency variance	$544	F