Check my work 9 Highland Company produces a lightweight backpack that is popular
ID: 2562611 • Letter: C
Question
Check my work 9 Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below: 11.12 points Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials Direct labor $4.00 per yard per direct $ 2 labor-hour eBook Variable manufacturing overhead Total standard cost per unit Print References Overhead is applied to production on the basis of direct labor-hours. During March, 490 backpacks were manufactured and sold. Selected information relating to the month's production is given below: Variable Materials Used $ 8,820 7,035 Direct Manufacturing Labor $5,586 Overhead $1,176 $1,249 Total standard cost allowed Actual costs incurred Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance $ 560U For the month's production.Explanation / Answer
1. Std. cost/backpack Direct materials 8820/490= 18 Direct labor 5586/490= 11.4 VMOH 1176/490= 2.4 1. Total Std. cost/backpack 31.8 Diff. bet. Std. & actual cost per backpack in Mar.(given) 0.20 F 2. So. Actual cost /backpack 31.8-0.2 31.6 3. Std.d/m cost per back pack Total std.cost/Total backpacks mfd. 8820/490= 18 SQ of D/M per back pack (in Yards) 18/4= 4.5 4. Total Material cost variance=Std. costs allowed-Actual costs incurred=8820-7035= 1785 F Material Quantity Variance= 560 U (Given) Total MCV= MQV+ MPV ie. 1785F=560 U+ MPV So, Material Price Variance= 1785 F+ 560U= 2345 F 5 VMOH /back pack 2.4 So,Std. D/L hrs.reqd. per backpack = 2.4/2= 1.2 5. Std. D/L rate/hr.= $ 11.4/1.2 hrs. 9.5 6 Actual cost/backpack 31.6 Total actual cost for 490 backpacks=490*31.6= 15484 Actual D/M costs incurred 7035 Actual VMOH costs incurred 1249 Total 8284 So, Actual D/L costs incurred= 15484-8284= 7200 Actual d/l hrs. 750 So, Actual D/l rate/hr.=7200/750= 9.6 DL Rate Variance =(SRAR )*Actual hrs. DL Rate Variance =(9.59.6 )*750 75 U DL Eff.V=(Std.hrs-Actual hrs.)*Std.Rate/hr. DL Eff.V=((1.2*490)-750)*9.5 1539 U Verification Total D/L Cost Variance=DLRV+DLEV (7200-5586)=1614 U=75 U+ 1539 U= 1614 U 7 Actual VMOH costs incurred 1249 Actual D/L hrs. 750 VMOH cost /Hr.= 1249/750= 1.66533 VMOH Rate Variance =(SRAR )*Actual hrs. VMOH Rate Variance =(1.21.66533 )*750 348.9975 U VMOH Eff.V=(Std.hrs-Actual hrs.)*Std.Rate/hr. VMOH Eff.V=((2*490)-750)*1.2 276 F Verification Total VMOH Cost Variance=VMOH RV+VMOH EV (1176-1249)=73 U= 349 U+ 276 F= 73 U 8. Std. cost card for 1 backpack Std. qty./Hrs. Std. Price/Rate Std. Cost Direct materials 4.5 4 18 Direvt labor 1.2 9.5 11.4 VMOH 1.2 2 2.4 Total std. cost/unit 31.8 7 CORRECTION Actual VMOH costs incurred 1249 Actual D/L hrs. 750 VMOH cost /Hr.= 1249/750= 1.66533 VMOH Rate Variance =(SRAR )*Actual hrs. VMOH Rate Variance =(21.66533 )*750 251 F VMOH Eff.V=(Std.hrs-Actual hrs.)*Std.Rate/hr. VMOH Eff.V=((1.2*490)-750)*2 324 U Verification Total VMOH Cost Variance=VMOH RV+VMOH EV (1176-1249)=73 U= 251 F+ 324 U= 73 U