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 or Hours	Standard Price or Rate	Standard Cost
Direct materials	?	$3.00 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, 570 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*	$8,550	$6,384	$1,596
Actual costs incurred	$5,900	?	$1,716
Materials price variance	?
Materials quantity variance	$ 300 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	1,000
Standard overhead rate per direct labor-hour	$2.00
Difference between standard and actual cost per backpack produced during March	$0.20	F

What was the labor rate variance for March? The labor efficiency variance? (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance))

8.	Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places.)

	Standard Quantity or Hours			Standard Price or Rate		Standard Cost
Direct materials		yards		$3.00	per yard
Direct labor		hours			per hour
Variable manufacturing overhead		hours		$2.00	per direct labor-hour
Total standard cost						$0.00