Highland Company produces a lightweight backpack that is popular with college st

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 QuantityStandard Price Standard Cost or Hours or Rate $5.10 per yard Direct materials 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, 720 backpacks were manufactured and sold. Selected information relating to the month's production is given below: Materials Used $14,688 $12,218 Variable Manufacturing Overhead $2,304 $2,722 Direct Labor $13,248 Total standard cost allowed Actual costs incurred aterials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance $510 U For the month's production The following additional information is available for March's production: Actual direct labor-hours Standard overhead rate per direct labor-hour Difference between standard and actual cost per backpack produced during March 1,260 $2.00 $0.25 F

Explanation / Answer

Standard Quantity Standard Price Standard or Hours or Rate Cost   Direct materials 4 $5.10 per yard 20.4   Direct labor 1.6 11.5 18.4   Variable mfg overhead 1.6 $2 per direct labor hour 3.2      Total standard cost 42.0    Materials Used Direct Labor Variable Manufacturing Overhead TOTAL   Total standard cost allowed $14688       $13,248 $2,304 $30,240   Actual costs incurred $12218       15120 $2,722 30,060   Materials price variance 2980 F   Materials quantity variance $ 510 U      Labor rate variance 630 U   Labor efficiency variance 1242 U   Variable overhead rate variance 202 U   Variable overhead efficiency variance 216 U

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.