Question

I only need 4, 6, 7, & 8

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 $6.00 per yard Standard Cost $ ? Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit $ 2 per direct labor-hour $? 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 $ 12,720 $ 11,925 Direct Labor $8,056 Variable Manufacturing Overhead $1,696 $2.809 $ 1,590 U 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 *For the month's production The following additional information is available for March's production: 795 Actual direct labor-hours 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.

Answer 1

Answer

Standard Actuals Units Standard Hours (SH) Direct Labor Cost Srd Rate Per Hour (SR) 530 848 8,056 9.50 Units AH = Direct Labor Cost AR 530 795 7,632 9.60 $ Direct Material cost Consumed Standard Quantity of Raw Material (SQ) Standard Price per yard (SP) 12,720 2,120 6.00 Direct Material cost Consumed AQ AP = 11,925 2,385 5.00 $ $ Variable OH cost Normal Overhead (NH) SR 1,696 848 2.00 Variable OH cost AH AR 2,809 795 3.53 $ $ Varaiance Standard $ Total cost per back pack Direct Labor Cost Direct Material cost Consumed Variable OH cost Total cost per back pack Material Price Materials price variance-(SP-AP)*AQ 15.20 24.00 3.20 42.40 Actuals $ 14.40 $ 22.50 $ 5.30 $ 42.20 $ $ $ 0.20 2,385 Favourable Materials quantity variances=(SQ-AQ)*SP (2120-AQ) x 6 = (2120-AQ) = AQ= -1,590 Unfavourble -1,590 -265 2,385 Labor rate of pay variance=(SR-AR)*AH -80 Unfavourble Labor efficiency Variance=(SH-AH)*SR 504 Favourable Variable OH rate Variance=(SR-AR)*AH Variable OH efficiency Variance=(NH-AH)*SR Total Varaiable OH variance -1,219 Unfavourble 106 Favourable -1,113 Unfavourble $ Answer i. Standard Cost of Single Backpack ii. Actual Cost of Single Backpack ili. Standard yards of material per backpack = iv. Material price variance v. Standard Direct labour rate (SR) vi. Labor rate variance Labor efficiency variance vii. OH rate variance OH efficiency variance viii. Standard cost card 42.40 42.20 4.00 yards 2,385 Favourable 9.50 per hour -80 Unfavourble 504 Favourable (1,219) Unfavourble 106 Favourable $ Direct Material Direct Labor Variable manufacturing Ohs Total Standard cost per unit Std Qty / Std Stad Price / Hours Rate 4 $ 6.00 1.6 $ 9.50 1.6 $ 2.00 Standard Cost $ $ $ 24.00 15.20 3.20 42.40