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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 1,230 hours each month to produce 2,050 sets of covers. The standard costs associated with this level of production are:
|?||Total||Per Set |
|??Variable manufacturing overhead |
?? ???(based on direct labor-hours)
During August, the factory worked only 750 direct labor-hours and produced 1,500 sets of covers. The following actual costs were recorded during the month:
|?||Total||Per Set |
|??Direct materials (3,900 yards)||$||19,500??||$||13.00||?|
|??Variable manufacturing overhead||$||4,800??||?||3.20||?|
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