Highland Company produces a lightweight backpack that is popular with college st
ID: 2459335 • Letter: H
Question
Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below:
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:
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))
What was the variable overhead rate variance for March? The variable overhead efficiency variance?(Do not round 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))
Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places.)
Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below:
Explanation / Answer
Standard Quantity Standard Price Standard or Hours or Rate Cost Direct materials 3.2 $8.00 per yard 25.6 Direct labor 1.5 10 15.0 Variable manufacturing overhead 1.5 $2 per direct 3.0 Total standard cost 43.6 Materials Used Direct Labor Variable Manufacturing Overhead TOTAL Total standard cost allowed* $15,360 $9,000 $1,800 $26,160 Actual costs incurred $14,210 9797 $2,033 26040 Materials price variance 2030 F Materials quantity variance $ 880 U Labor rate variance 97 U Labor efficiency variance 700 U Variable overhead rate variance 93 U Variable overhead efficiency variance 140 U