Question
In: Accounting
Problem 10-16 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Highland Company produces a lightweight backpack that is...
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 | ? | $ | 4.50 | per yard | $ | ? | |
| Direct labor | ? | ? | ? | ||||
| Variable manufacturing overhead | ? | $ | 2 | per direct labor-hour | ? | ||
| Total standard cost per unit | $ | ? | |||||
Overhead is applied to production on the basis of direct labor-hours. During March, 530 backpacks were manufactured and sold. Selected information relating to the month’s production is given below:
| Materials Used |
Direct Labor | Variable Manufacturing Overhead |
|||||||
| Total standard cost allowed* | $ | 9,540 | $ | 5,936 | $ | 1,484 | |||
| Actual costs incurred | $ | 8,645 | ? | $ | 1,690 | ||||
| Materials price variance | ? | ||||||||
| Materials quantity variance | $ | 1,575 | 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 March’s production:
| Actual direct labor-hours | 795 | |||
| Difference between standard and actual cost per backpack produced during March | $ | 0.20 | F | |
Required:
Hint: It may be helpful to complete a general model diagram for direct materials, direct labor, and variable manufacturing overhead before attempting to answer any of the requirements.
1. What is the standard cost of a single backpack?
2. What was the actual cost per backpack produced during March?
3. How many yards of material are required at standard per backpack?
4. What was the materials price variance for March if there were no beginning or ending inventories of materials?
5. What is the standard direct labor rate per hour?
6. What was the labor rate variance for March? The labor efficiency variance?
7. What was the variable overhead rate variance for March? The variable overhead efficiency variance?
8. Prepare a standard cost card for one backpack.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Problem 10-16 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Highland Company produces a lightweight backpack that is...
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 per unit
$
?
Overhead is applied to production on the basis...
Problem 10-16 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Highland Company produces a lightweight backpack that is...
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
?
$
6
per yard
$
?
Direct labor
?
?
?
Variable manufacturing
overhead
?
$
3
per direct labor-hour
?
Total standard cost per
unit
$
?
Overhead is applied to production on the basis...
Problem 10-16 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Highland Company produces a lightweight backpack that is...
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
?
$
4.00
per yard
$
?
Direct labor
?
?
?
Variable manufacturing
overhead
?
$
2
per direct labor-hour
?
Total standard cost per
unit
$
?
Overhead is applied to production on the basis...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (4,000 pools)
$
210,000
$
210,000
Variable
expenses:
Variable cost of goods sold*
50,680
63,710
Variable selling
expenses
12,000
12,000
Total variable
expenses
62,680
75,710
Contribution margin
147,320
134,290
Fixed
expenses:
Manufacturing
overhead
61,000
61,000
Selling and administrative
76,000
76,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (6,000
pools)
$
240,000
$
240,000
Variable expenses:
Variable cost of goods sold*
57,900
74,210
Variable selling expenses
18,000
18,000
Total variable expenses
75,900
92,210
Contribution margin
164,100
147,790
Fixed expenses:
Manufacturing overhead
66,000
66,000
Selling and administrative
84,000
84,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (7,000 pools)
$
255,000
$
255,000
Variable expenses:
Variable cost of goods sold*
85,400
104,590
Variable selling expenses
15,000
15,000
Total variable expenses
100,400
119,590
Contribution margin
154,600
135,410
Fixed expenses:
Manufacturing overhead
64,000
64,000
Selling and administrative
79,000
79,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (3,000 pools)
$
179,000
$
179,000
Variable expenses:
Variable cost of goods sold*
33,390
44,540
Variable selling expenses
11,000
11,000
Total variable expenses
44,390
55,540
Contribution margin
134,610
123,460
Fixed expenses:
Manufacturing overhead
50,000
50,000
Selling and administrative
75,000
75,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (8,000 pools)
$
265,000
$
265,000
Variable
expenses:
Variable cost of goods sold*
88,960
106,490
Variable selling
expenses
16,000
16,000
Total variable
expenses
104,960
122,490
Contribution margin
160,040
142,510
Fixed
expenses:
Manufacturing
overhead
65,000
65,000
Selling and administrative
80,000
80,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (4,000 pools)
$
239,000
$
239,000
Variable expenses:
Variable cost of goods sold*
57,680
70,390
Variable selling expenses
16,000
16,000
Total variable expenses
73,680
86,390
Contribution margin
165,320
152,610
Fixed expenses:
Manufacturing overhead
72,000
72,000
Selling and administrative
82,000
82,000...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool...
Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2,
LO10-3]
Miller Toy Company manufactures a plastic swimming pool at its
Westwood Plant. The plant has been experiencing problems as shown
by its June contribution format income statement below:
Flexible Budget
Actual
Sales (4,000 pools)
$
239,000
$
239,000
Variable expenses:
Variable cost of goods sold*
57,680
70,390
Variable selling expenses
16,000
16,000
Total variable expenses
73,680
86,390
Contribution margin
165,320
152,610
Fixed expenses:
Manufacturing overhead
72,000
72,000
Selling and administrative
82,000
82,000...
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