Homework due friday

Question 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 Standard Price Standard or Hours or Rate Cost Direct materials ? $6 per yard 5? Direct labor ? ? ? Variable manufacturing overhead ? $3 per direct labor-hour ? Total standard cost per unit 5? Overhead is applied to production on the basis of direct labor-hours. During March, 1,000 backpacks were manufactured and sold. Selected information relating to the month's production is given below: Variable Materials Direct Manufacturing Used Labor Overhead Total standard cost allowed' $16,800 $21,000 $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 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 1,500 Difference between standard and actual cost per backpack produced during March 50.15 F Required: (Hint: It may be helpful to complete a general model diagram [or boxes) for direct materials, direct laborI and variable manufacturing overhead before attempting to answer requirements 1-7}. Show all your calculations to receive the full grade 1. How many yards of material are required at standard in total and per backpack? 2. What was the materials price variance for March if there were no beginning or ending inventories of materials? What was the variable overhead rate variance for March? The variable overhead efficiency variance? The labor efciency variance? P1P?\" 6. What are some of the likely causes for the variances in requirements (2) through (5}? List at least two possible causes for each variance. [8 points] 7. What was the actual cost per back pack produced during March? [3 EXTRA points] 3. What was the labor rate variance for March? [6 EXTRA points] Question 4 1. A company's purchasing manager bought 5,000 pounds of material for $5.50 per pound instead of the budgeted $6.00 per pound. The company has a policy of rewarding employees with a 20% of any cost savings they generate. Before awarding a $500 bonus to the purchasing manager, what other variances would you look at to determine the total effect of the purchasing decision? Explain 2. Suppose a company budgeted an operating profit of $100 on sales of $1,000. Actual sales were $900. The marketing department claimed that because sales were down by 10%, it was responsible for only 10% of $100 or $10 of any drop in profit. Any further shortfall must be someone else's responsibility. Comment on this claim. 3. Consider a company that plans to sell 1,000 units for $3 per unit. Budgeted variable costs are $2 per unit, budgeted fixed costs are $700 and staticbudget profit is $300. Supposed the Company actually sells 800 units and income is $110. Compute and interpret the static budget income variance and the flexible budget income variance. 4. Suppose a plant manager planned to produce 100 units of product at a total cost of $1,000. Instead, actual production was 10% higher at 110 units. When actual costs came in at less than 10% increase in costs, or $1,000, the plant manager claimed that she should get credit for a favorable variance equal to the amount by which the actual costs fell short of $1,000. Comment on this claim