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 Quatity Stadard Price Standard or Hours Cost or Rate $8.00 per yard Direct materials Direct labor Variable manufacturing overhead $2 per diredt 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: Materials Used $15,360 $14,210 Variable Manufacturing Overheacd $1,800 $2,033 Direct Labor $9,000 Total standard cost allowed* Actual costs incurred Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance $ 880 U iable overhead efficiency variance For the month's production. The following additional information is available for March's production Actual direct labor-hours Standard overhead rate per direct labor-hour Difference between standard and actual cost per backpack produced during March $0.20 IF 970 $2.00