Problem 10-16 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 Standard Price Standard or Hours or Rate Direct materials $8.00 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, 600 backpacks were manufactured and sold. Selected information relating to the month's production is given below: Variable Manufacturing Materials Used Direct Labor Overhead $15,360 $9,000 $1,800 Total standard cost allowed $2,033 Actual costs incurred $14,210 Materials price variance 880 U Materials quantity variance 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 970 Standard overhead rate per direct labor-hour $2.00 Difference between standard and actual cost per backpack produced during March $0.20 F