Question

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	?	$4.5 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, 525 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*	$9,450	$5,880	$1,470
Actual costs incurred	$7,700	?	$1,650
Direct materials price variance	?
Direct materials quantity variance	$450 U
Direct labor rate variance		?
Direct 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	900
Standard overhead rate per direct labor-hour	$3.9
Standard price of one yard of materials	$7.8
Difference between standard and actual cost per backpack produced during March	$.20	F

Requirement 1:

a)What is the standard cost of a single backpack? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Standard cost for March Production:           Materials                                          ___________           Direct Labor                                     __________           Variable manuf overhead               ___________           Total standard cost             Number of backpacks produced    __________            Standard cost of a single backpack __________

b)What was the actual cost per backpack produced during March? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Standard cost of a single backpack                            _________

Deduct difference between standard and actual cost _________

Actual cost per backpack                                            _________

c)How many yards of material are required at standard per backpack? (Round your answer to 2 decimal places.) Total standard cost of materials allowed during March _________ Number of backpacks produced during March              _________ Standard materials cost per backpack                          _________ Standard materials cost per yard                                  _________ Number of yards per backpack                                     _________

d)What was the direct materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)

Materials price variance      __________    ___________

Materials quantity variance __________     __________

Spending bariance               _________      __________

Answer 1

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Part a
	Units	Standard Cost	Total	Q/Hour	Rate
Direct Material	525	9450	18	4	4.5
Direct Labor	525	5880	11.2	1.4	8
Var Ovh	525	1470	2.8	1.4	2
Standard Cost		16800	32
Part b
Actual Cost	32-0.2		31.8
Total Actual Cost	31.8*525		16695
Part c
	Total standard cost of materials allowed during March _________	9450
	Number of backpacks produced during March              _________	525
	Standard materials cost per backpack                          _________	18
	Standard materials cost per yard                                  _________	4.5
	Number of yards per backpack	4
Part d
	Standard Cost of Material Used	9450
	Actual Cost of Material Used	7700
	Total Variance	1750	Favorable
	Quantity Variance	450	Unfavorable
	Price Variance 1750+450	2200	Favorable