Highland Company produces a lightweight backpack popular with college students. Standard variable costs relating to a single backpack are given below: Standard Quantity or Hours Standar
Highland Company produces a lightweight backpack popular with college students. Standard variable costs relating to a single backpack are given below:
| Standard Quantity or Hours | Standard Price or Rate | |||
|---|---|---|---|---|
| Direct materials | ?question mark | $ 6.00 | per yard | $ ?question mark |
| Direct labor | ?question mark | ?question mark | ?question mark | |
| Variable manufacturing |
?question mark | $ 2 | per direct labor-hour | ?question mark |
| Total standard cost per unit | $ ?question mark |
Overhead is applied to production based on direct labor-hours. During March, 800 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* | $ 19,200 | $ 9,200 | $ 1,600 | |
| Actual costs incurred | $ 11,100 | ?question mark | $ 4,740 | |
| Materials price variance | ?question mark | |||
| Materials quantity variance | $ 3,000 | U | ||
| Labor rate variance | ?question mark | |||
| Labor efficiency variance | ?question mark | |||
| Variable overhead rate variance | ?question mark | |||
| Variable overhead efficiency variance | ?question mark |
*For the month's production.
The following additional information is available for March’s production:
| Actual direct labor-hours | 1,200 | |
|---|---|---|
| Difference between standard and actual cost per backpack produced during March | $ 0.15 | F |
Required:
Hint: It may be helpful to complete a general model diagram for direct materials, direct labor, and variable manufacturing overhead before attempting to answer any of the requirements.
required questions:
What was the labor rate variance for March? The labor efficiency variance?
Note: Do not round your intermediate calculations. 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.
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What was the variable overhead rate variance for March? The variable overhead efficiency variance?
Note: Do not round intermediate calculations. 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.
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Prepare a standard cost card for one backpack.
Note: Round your answers to 2 decimal places.
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