Part A

Queenstown Baggage Limited has developed the following cost standards for the production of its leather backpacks:

Standard cost per backpack Leather (0.9 metre x $22 per metre) $19.80 Direct labour (1.3 hours x $9 per hour) $11.70 Variable overhead (1.3 hours x $15 per $19.50 hour)Number of backpacks produced 15,000 Direct labour hours incurred 18,800 Metres of leather purchased 14,500 Metres of leather used in production 14,100 Cost of leather purchased $306,675 Direct labour cost $159,800 Variable overhead cost $285,760