2. Problem 10-16 (Algo) Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3]

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, 800 backpacks were manufactured and sold. Selected information relating to the months 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			?		$	4,740
Materials price variance		?
Materials quantity variance	$	3,000	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 Marchs 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.

1. What is the standard cost of a single backpack? (Round your answer to 2 decimal places.)

2. What was the actual cost per backpack produced during March? (Round your answer to 2 decimal places.)

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

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

5. What is the standard direct labor rate per hour? (Round your answers to 2 decimal places.)

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

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

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

Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places.) Standard Price or Rate $ Standard Cost Standard Quantity or Hours yards hours hours Direct materials Direct labor Variable manufacturing overhead Total standard cost 6.00 per yard per hour $ 2.00 per direct labor-hour Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places.) Standard Price or Rate $ Standard Cost Standard Quantity or Hours yards hours hours Direct materials Direct labor Variable manufacturing overhead Total standard cost 6.00 per yard per hour $ 2.00 per direct labor-hour