Question

Problem 10-16 (Algo) Comprehensive Variance Analysis (L010-1, 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 $6.00 per yard $? Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit $ per direct 2 labor-hour Overhead is applied to production on the basis of direct labor-hours. During March, 400 backpacks were manufactured and sold. Selected information relating to the month's production is given below. Materials Used $9,120 $ 5,520 Direct Labor $ 5,040 Variable Manufacturing Overhead $ 960 $2,620 Total standard cost allowed Actual costs incurred Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance $1,920 u "For the month's production The following additional Information is available for March's production: 600 Actual direct labor-hours Difference between standard and actual cost per backpack produced during March 50.20 F

Answer 1

190 Standard cost of Bag pack · direct materials (4 yards x 6) = 24 direct labour (1•2 X 10.50) _ 13 manufacturing overhead : 240 (102x2) 39.40 Lii) Actual cost per bag pack = 390440-0020 (variani - 39.20 (f) 4 cách fivmateria pricevaitance_- 0 AQXSP- AQXAP = 1840% 6 - 5,520 = 5,520 (F). SQ = standard quantity sp - Standard price LAQ - Actual quantity SR: Standard rale AR = Actual Rate

Actual post direct labour hours =600 Standard labour cost : 5040 SHX SR = 5040 480XSR = 5040 __ SR = 10.50 material quantity variance 50x5p - AOXSP 9120 - AQ x 6 AO : 1920 (U) = - 1920 = - 1920 = 1840

Geven Standard for actual Production = 9,120 600 X 5P 79120 - SQ X6 =4120 so 1520 i-e) 4 Yards per bag pack Material quantity variance - 1920 Unfavourable SQxSP - AQXSP : -1920 9120 - AQX 6 = -1920 - 1,840 АО Actual cost of labour AHX AR 600 X AR - AR = 5520 = 5, 520 = 51520 902 Standard cost of varpable manufacturing Overhead = 960 SHX SR = 960 SHX 2 = 960 - SH 480 poel 480 = 1.2 ES direct labourhours per 400 standard bagpack
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