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 RateStandard Cost Direct materials? $ 6.00 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, 400 backpacks were manufactured and sold. Selected information relating to the month’s production is given below: Materials Used Direct LaborVariable Manufacturing Overhead Total standard cost allowed*$ 9,120 $ 5,040$ 960 Actual costs incurred$ 5,520 ?$ 2,620 Materials price variance? Materials quantity variance$ 1,920 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-hours600 Difference between standard and actual cost per backpack produced during March$ 0.20F What was the variable overhead rate variance for March? The variable overhead efficiency variance?Prepare a standard cost card for one backpack.

A standard cost card refers to a card that contains the standard rate of all the materials, labor,…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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
Direct materials	?	$ 6.00 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, 400 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*	$ 9,120	$ 5,040	$ 960
Actual costs incurred	$ 5,520	?	$ 2,620
Materials price variance	?
Materials quantity variance	$ 1,920 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	600
Difference between standard and actual cost per backpack produced during March	$ 0.20	F

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

Prepare a standard cost card for one backpack.

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