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 995 hours each month to produce 1,990 sets of covers. The standard costs associated with this level of production are:







Total
Per Set
of Covers


Direct materials
$
47,362
$
23.80



Direct labor
$
8,955

4.50



Variable manufacturing overhead
(based on direct labor-hours)
$
2,388

1.20














$
29.50

















During August, the factory worked only 1,050 direct labor-hours and produced 2,300 sets of covers. The following actual costs were recorded during the month:







Total
Per Set
of Covers


Direct materials (8,200 yards)
$
50,600
$
22.00



Direct labor
$
10,580

4.60



Variable manufacturing overhead
$
4,600

2.00














$
28.60

















At standard, each set of covers should require 3.50 yards of material. All of the materials purchased during the month were used in production.


QUESTION: How​ would you calculate the standard price and actual price i thought standard price would be 23.80 and Actual Price would be 22?


Please let me know

There are a number of variances that can be calculated these relate to volume and price, You have already been told what the standard is for an imput of 995 hours and output of 1990. That is standard hours are 2 per unit We know the standard for material usage, and so forth Calculate the variances. These figures you quote are material costs and don't take into account conversion costs'

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