Please answer parts 5-8 according to the images attached below. 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 Direct materials ? $ 5.00 per yard $ ? Direct labor ? ? ? Variable manufacturing overhead ? $ 2 per direct labor-hour ? Total standard cost per unit $ ? Overhead is applied to production on the basis of direct labor-hours. During March, 780 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* $ 15,600 $ 13,104 $ 2,496 Actual costs incurred $ 13,112 ? $ 5,491 Materials price variance ? Materials quantity variance $ 790 U Labor rate variance ? 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 1,170 Difference between standard and actual cost per backpack produced during March $ 0.10 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.) 1. What is the standard cost of a single backpack? 2. What was the actual cost per backpack produced during March? 3. How many yards of material are required at standard per backpack? 4. What was the materials price variance for March if there were no beginning or ending inventories of materials? 5. What is the standard direct labor rate per hour? 6. What was the labor rate variance for March? The labor efficiency variance? 7. What was the variable overhead rate variance for March? The variable overhead efficiency variance? 8. Prepare a standard cost card for one backpack.

Please answer parts 5-8 according to the images attached below. 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 Direct materials ? $ 5.00 per yard $ ? Direct labor ? ? ? Variable manufacturing overhead ? $ 2 per direct labor-hour ? Total standard cost per unit $ ? Overhead is applied to production on the basis of direct labor-hours. During March, 780 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* $ 15,600 $ 13,104 $ 2,496 Actual costs incurred $ 13,112 ? $ 5,491 Materials price variance ? Materials quantity variance $ 790 U Labor rate variance ? 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 1,170 Difference between standard and actual cost per backpack produced during March $ 0.10 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.) 1. What is the standard cost of a single backpack? 2. What was the actual cost per backpack produced during March? 3. How many yards of material are required at standard per backpack? 4. What was the materials price variance for March if there were no beginning or ending inventories of materials? 5. What is the standard direct labor rate per hour? 6. What was the labor rate variance for March? The labor efficiency variance? 7. What was the variable overhead rate variance for March? The variable overhead efficiency variance? 8. Prepare a standard cost card for one backpack.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please answer parts 5-8 according to the images attached below.

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
Direct materials	?	$ 5.00	per yard	$ ?
Direct labor	?	?		?
Variable manufacturing overhead	?	$ 2	per direct labor-hour	?
Total standard cost per unit				$ ?

Overhead is applied to production on the basis of direct labor-hours. During March, 780 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*	$ 15,600		$ 13,104	$ 2,496
Actual costs incurred	$ 13,112		?	$ 5,491
Materials price variance	?
Materials quantity variance	$ 790	U
Labor rate variance			?
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	1,170
Difference between standard and actual cost per backpack produced during March	$ 0.10	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.)

1. What is the standard cost of a single backpack?

2. What was the actual cost per backpack produced during March?

3. How many yards of material are required at standard per backpack?

4. What was the materials price variance for March if there were no beginning or ending inventories of materials?

5. What is the standard direct labor rate per hour?

6. What was the labor rate variance for March? The labor efficiency variance?

7. What was the variable overhead rate variance for March? The variable overhead efficiency variance?

8. Prepare a standard cost card for one backpack.

**Instructions:**

Complete this question by entering your answers in the tabs below.

**Tab Selection:**
- Required 1
- Required 2
- Required 3
- Required 4
- Required 5
- Required 6
- Required 7
- Required 8

**Task:**

Prepare a standard cost card for one backpack. *(Round your answers to 2 decimal places.)*

**Table Structure:**

1. **Row Headings:**
- Direct materials
- Direct labor
- Variable manufacturing overhead
- Total standard cost

2. **Columns:**
- Standard Quantity or Hours
- Standard Price or Rate
- Standard Cost

**Details:**

- For **Direct Materials:**
- Standard Price: $5.00 per yard

- For **Variable Manufacturing Overhead:**
- Standard Rate: $2.00 per direct labor-hour

**Buttons:**
- Required 7 (active)
- Required 8 (inactive)

This table is used to calculate the costs involved in producing one backpack, including materials, labor, and overhead, with spaces provided for the user to enter the appropriate quantities and costs.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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