Requirements 1-3 have been answered. Highland Company produces a lightweight bac
ID: 2435294 • Letter: R
Question
Requirements 1-3 have been answered.
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 Standard Price Standard
or Hours or Rate Cost
Direct materials ? $6.7 per yard $?
Direct labor ? ? ?
Variable manufacturing overhead ? $3.3 per direct labor-hour ?
Total standard cost $?
Overhead is applied to production on the basis of direct labor-hours. During March, 1,100 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* $29,480 $16,016 $5,808
Actual costs incurred $25,630 ? $5,008
Direct materials price variance ?
Direct materials quantity variance $1,742 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 1,960
Standard overhead rate per direct labor-hour $3.3
Standard price of one yard of materials $6.7 Difference between standard and actual cost per backpack produced during March $.75 F
Requirement 1:
What is the standard cost of a single backpack? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Standard cost $46.64
Requirement 2:
What was the actual cost per backpack produced during March? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Actual cost $45.89
Requirement 3:
How many yards of material are required at standard per backpack? (Round your answer to 2 decimal places.)
Material 4 yards per backpack
Requirement 4:
What was the direct materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)
Price variance $_____?_____ F
Requirement 5:
What is the standard direct labor rate per hour? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Standard rate $ _____?_____ per DLH
Requirement 6:
What was the direct labor rate variance for March? The direct labor efficiency variance? (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.)
Labor rate variance $_____?_____ U
Labor efficiency variance $_____?_____ U
Requirement 7:
What was the variable overhead rate variance for March? The variable overhead efficiency variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)
Rate variance $_____?_____ F
Efficiency variance $_____?_____ U
Requirement 8:
Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Standard Quantity Standard Price Standard Cost
or Hours or Rate
Direct materials _____?_____yards 6.7 per yard $_____?_____
Direct labor _____?_____hours $__?__ per hour _____?_____
Variable manufacturing _____?_____hours 3.3 per hour _____?_____
overhead
Total standard cost $_____?_____
Explanation / Answer
Total units produced 1100 Requirement 1 standard material cost 29480 standard material cost per unit 29480/1100 26.8 Standard labor cost 16016 standard labor cost per unit 16016/1100 14.56 standard overhead cost 5808 standard over head cost per unit 5808/1100 5.28 Total standard cost per unit 46.64 Actual units produced 1100 Actual materials cost 25630 Actual materials cost per unit 25630/1100 23.3 Actual over headcost 5008 actual over head cost per unit 5008/1100 4.56 Actual labor cost per unit 18.03 Total actual cost per unit 45.89 Total standard cost per unit 46.64 less: difference between standard cost per unit and actual cost per unit 0.75 total actual cost per unit 45.89 total actual cost per unit 45.89 Less: material and overhead cost per unit 27.86 Actual labor cost per unit 18.03 Requirement 4 Material price variance (Actual quantity*actual price)-(Actual quantity *standard price) (1100*23.3)-(1100*26.8) 25630-29480= 3850(F) Requirement 5 standard direct labor per hour Standard direct labor rate per hour standard overhead rate per unit 5.28 standard overhead rate per direct labor hour 3.3 standard labor hours 5.28/3.3=1.60rs Labor cost per unit 14.56 standard labor cost per hr= 14.56/1.60=9.10 Requirement 6 Labor rate variance (Actual hrs*actual rate)-(actual hrs*standard rate) units produced=1100 Labor rate per unit=18.03 actual labor cost=1100*18.03= 19833 labor cost per hour=Total cost/No of hrs 19833/1960= 10.11 (1960*10.11)-(1960*9.10) 19815.60-17836= 1979.6(U) Labor efficiency variance (Actual hrs*standard rate)-(standard hrs* standard rate) standard hrs=Standard labor cost/ standard labor cost per hour=16016/9.10= 1760 hrs (1960*9.10)-(1760*9.10) 17836-16016= 1820(U) Requirement 7 Overhead efficiency variance Actual hrs worked-standard hrs worked* standard variable over head rate 1960-1760*5.28 1056(U) requirement 8 Standard cost per backpack materials 4 yards @6.7 per yard 26.8 labor 1.6 hrs per unit @9.10 per hr 14.56 overheads per unit 5.28 Total standard cost per unit 46.64
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