Highland Company produces a lightweight backpack that is popular with college st
ID: 2597866 • 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, 640 backpacks were manufactured and sold. Selected information relating to the month’s production is given below:
What was the actual cost per backpack produced during March? (Round your answers to 2 decimal places.)
How many yards of material are required at standard per backpack?
What was the materials price variance for March if there were no beginning or ending inventories of materials? (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).)
What is the standard direct labor rate per hour?
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.)
Standard Quantityor Hours Standard Price
or Rate Standard
Cost Direct materials ? $6.00 per yard $ ? Direct labor ? ? ? Variable manufacturing overhead ? $2 per direct
labor-hour ? Total standard cost $?
Explanation / Answer
1 standard cost for march production Materials 14592 direct labor 8064 Variable manufacturing overhead 1536 total standard cost (14592+8064+1536)---------a 24192 Number of backpacks produced---------b 640 Standard cost of a single backpack a/b i.e 24192/640 37.8 2 Standard cost of a single backpack (as above) 37.8 Deduct difference between standard and actual cost 0.20 Actual cost per backpack 37.6 3 Total standard cost of materials allowed during March---a 14592 Number of backpacks produced during March----b 640 Standard materials cost per backpack---a/b 22.8 Standard materials cost per yard 6 Number of yards per backpack------22.8/6 3.8yards per backpack