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Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below: |
| Standard Quantity or Hours | Standard Price or Rate |
Standard Cost |
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| Direct materials | ? | $7.8 per yard | $? | |
| Direct labor | ? | ? | ? | |
| Variable manufacturing overhead | ? | $3.9 per direct labor hour | ? | |
| Total standard cost |
$? |
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Overhead is applied to production on the basis of direct labor hours. During March, 1,200 backpacks were manufactured and sold. Selected information relating to the month’s production is given below: |
| Materials Used | Direct Labor | Variable Manufacturing Overhead |
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| Total standard cost allowed* | $28,080 | $16,116 | $7,956 | |
| Actual costs incurred | $26,696 | ? | $7,356 | |
| Direct materials price variance | ? | |||
| Direct materials quantity variance | $1,248 U | |||
| Direct labor rate variance | ? | |||
| Direct labor efficiency variance | ||||
| Variable overhead rate variance | ? | |||
| Variable overhead efficiency variance | ? | |||
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| *For the month’s production. |
| The following additional information is available for March’s production: |
| Actual direct labor hours | 2,140 | |
| Standard overhead rate per direct labor hour | $3.9 | |
| Standard price of one yard of materials | $7.8 | |
| Difference between standard and actual cost per backpack produced during March | $.15 | F |
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| Requirement 1: |
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What is the standard cost of a single backpack? (Round your answer to 2 decimal places. Omit the “$” sign in your response.) |
| Standard cost | $ |
| Requirement 2: |
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What was the actual cost per backpack produced during March? (Round your answer to 2 decimal places. Omit the “$” sign in your response.) |
| Actual cost | $ |
| Requirement 3: |
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How many yards of material are required at standard per backpack? (Round your answer to 2 decimal places.) |
| Material | yards per backpack |
| Requirement 4: |
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What was the direct materials price variance for March? (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. Omit the “$” sign in your response.) |
| Price variance | $ | (Click to select) None U F |
| Requirement 5: |
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What is the standard direct labor rate per hour? (Round your answer to 2 decimal places. Omit the “$” sign in your response.) |
| Standard rate | $ | per DLH |
| Requirement 6: |
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What was the direct labor rate variance for March? The direct labor efficiency variance? (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. Omit the “$” sign in your response.) |
| Labor rate variance | $ | (Click to select) None F U |
| Labor efficiency variance | $ | (Click to select) U F None |
| Requirement 7: |
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What was the variable overhead rate variance for March? The variable overhead efficiency variance?(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. Omit the “$” sign in your response.) |
| Rate variance | $ | (Click to select) F U None |
| Efficiency variance | $ | (Click to select) U F None |
| Requirement 8: |
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Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places. Omit the “$” sign in your response.) |
| Standard Quantity or Hours |
Standard Price or Rate | Standard Cost | |||
| Direct materials | yards | 7.8 per yard | $ | ||
| Direct labor | hours | $ per hour | |||
| Variable manufacturing overhead | hours | 3.9 per hour | |||
| Total standard cost |
$ |
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