Highland Company produces a lightweight backpack that is popular with college st

Question

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 Standard Price Standard
or Hours or Rate Cost


Direct materials ? $6.7 per yard $?
Direct labor ? ? ?
Variable manufacturing overhead ? $3.3 per direct labor-hour ?
Total standard cost $?


Overhead is applied to production on the basis of direct labor-hours. During March, 1,100 backpacks were manufactured and sold. Selected information relating to the month's production is given below:

Materials Used Direct Labor Variable
Manufacturing
Overhead

Total standard cost allowed* $29,480 $16,016 $5,808
Actual costs incurred $25,630 ? $5,008
Direct materials price variance ?
Direct materials quantity variance $1,742 U
Direct labor rate variance ?
Direct labor efficiency variance
Variable overhead rate variance ?
Variable overhead efficiency variance ?

*For the month's production.

The following additional information is available for March's production:


Actual direct labor-hours 1,960
Standard overhead rate per direct labor-hour $3.3
Standard price of one yard of materials $6.7 Difference between standard and actual cost per backpack produced during March $.75 F

Requirement 1:

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:

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:

How many yards of material are required at standard per backpack? (Round your answer to 2 decimal places.)

Material _____?_____yards per backpack

Requirement 4:

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 $_____?_____ F

Requirement 5:

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:

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 $_____?_____ U
Labor efficiency variance $_____?_____ U

Requirement 7:

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 $_____?_____ F
Efficiency variance $_____?_____ U

Requirement 8:

Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Standard Quantity Standard Price Standard Cost
or Hours or Rate

Direct materials _____?_____yards 6.7 per yard $_____?_____
Direct labor _____?_____hours $__?__ per hour _____?_____
Variable manufacturing _____?_____hours 3.3 per hour _____?_____
overhead
Total standard cost $_____?_____

Explanation / Answer

Total units produced and sold 1100 units Requirement 1 Standard material cost=29480 Standard material cost per unit=29480/1100 26.8 Standard labor cost=16016 standard labor cost per unit=16016H0 14.56 Standard overhead cost=5808 standard overhead cost per unit=5808/1100 5.28 Total standard cost per unit 46.64 Requirement 2 Actual units produced 1100 units Actual material cost=25630 Actual material cost per unit=25630H0 23.3 Actual over head cost=5008 Actualoverhead cost per unit=5008/1100 4.56 Actual labor per unit(45.89-23.3-4.56) 18.03 Total actual cost per unit 45.89 Total standard cost per unit 46.64 Less:Difference between standard and actual cost per unit 0.75 Actual cost per unit 45.89 Requirement 3 Standard material required per backpack Standard material cost per unit 26.8 standard cost per one yard 6.7 standard material=standard costperunit/rate 26.8/6.7 4yards Requirement 4 Direct materialprice variance (Actual quantity*actual price)-(Actual quantity* standard price) Actual quantity required=23.3/6.7= 3.47 yards (3.47*23.3)-(3.47*26.8)=12.91Unfavourable 80.85-92.99=12.91(unfavourable) Requirement5 standard direct labor rate per hour Standard labour hour cost per unit 14.56 stamdard pverhead rate per dirct labor 3.3 standard labor rate per hour=14.56/3.3 4.41 Requirement 6 Labor rate variance (actual hours*actual rate)-(actual hours*standard rate) (5.46*18.3)-(5.46*14.56) 99.91-79.49=20.42(Unfavourable) Labor efficiency variance (Actual hours*standard rate)-(standard hours* standard rate) (5.46*14.56)-(4.41*14.56) 79.49-64.20=15.29(unfavourable) Requirement 8 Standard material4400 yards at 6.7 per yard 29480 standard labor 4851 hrs at 3.3 per hrs 16008 overheads 5808 Total standard cost 103496 requirement 7 Overhead efficiency variance (Actual hrs worked*standard rate)-(standard hours *standard rate) (1960*5.28)-(1960*5.28)=0 variance

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.