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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
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 | ? | $4.70 per yard | $ ? | |
Direct labor | ? | ? | ? | |
Variable manufacturing overhead | ? | $2 per direct labor-hour | ? | |
Total standard cost | $? | |||
Overhead is applied to production on the basis of direct labor-hours. During March, 700 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* | $13,160 | $10,500 | $2,100 | |
Actual costs incurred | $10,730 | ? | $2,470 | |
Materials price variance | ? | |||
Materials quantity variance | $ 470 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 | 1,220 | |
Standard overhead rate per direct labor-hour | $2.00 | |
Difference between standard and actual cost per backpack produced during March | $0.34 | F |
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