Data P10-2 Part II:
Highland Company produces a lightweight backpack that is popular with college students.
Overhead is applied to production on the basis of direct labor hours.
HIGHLAND COMPANY
Standard Variable Costs for a single backpack:
	Standard	Standard		Standard
	Qty or hours	Price or Rate		Cost
Direct materials	?	$6	/yard	$?
Direct labor	?		?	?
Variable manufacturing overhead	?	$3	/hour	?
Total standard cost				$?
Backpacks manufactured and sold during March		1000
Selected information relating to the month's production is given below:
	Materials	Direct		Variable Mfg.
	Used	Labor		Overhead
Total standard cost allowed	$16,800	$10,500		$4,200
Actual costs incurred	$15,000	?		$3,600
Materials price variance	?
Materials quantity variance	$1,200	U
Labor rate variance		?
Labor efficiency variance		?
Variable overhead spending variance				?
Variable overhead efficiency variance				?
Additional information for March's production:
Actual direct labor-hours	1,500
Standard overhead rate per hour	$3.00
Standard price of one yard of materials	$6.00
Difference between standard and actual
cost per backpack produced in March	$0.15	F
Require:
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?
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 spending variance for March? The variable overhead
efficiency variance?
8. Prepare a standard cost card for one backpack.