Question

Problem 10-16 Comprehensive Variance Analysis [LO10-1, LO10-2,LO10-3]

Highland Company produces a lightweight backpack that is popularwith college students. Standard variable costs relating to a singlebackpack are given below:

	StandardQuantity or Hours	StandardPrice or Rate	Standard Cost
Directmaterials	?	$6.00 peryard	$ ?
Direct labor	?	?	?
Variable manufacturingoverhead	?	$2 perdirect labor-hour	?
Total standardcost			$?

Overhead is applied toproduction on the basis of direct labor-hours. During March, 730backpacks were manufactured and sold. Selected information relatingto the month’s production is given below:

	MaterialsUsed	DirectLabor	Variable Manufacturing Overhead
Total standard costallowed*	$17,520	$14,600	$2,336
Actual costsincurred	$15,200	?	$3,119
Materials pricevariance	?
Materials quantityvariance	$ 720 U
Labor ratevariance		?
Labor efficiencyvariance		?
Variable overheadrate variance			?
Variable overheadefficiency variance			?

*For the month'sproduction.

The following additionalinformation is available for March’s production:

Actual directlabor-hours	1,280
Standard overheadrate per direct labor-hour	$2.00
Difference betweenstandard and actual cost per backpack produced during March	$0.10	F

Required:

1.	What is the standard cost of asingle backpack?

2.	What was the actual cost perbackpack produced during March? (Round your answers to 2decimal places.)

3.	How many yards of material are required at standard perbackpack?

4.	What was the materials price variance for March if there were nobeginning or ending inventories of materials? (Do not roundintermediate calculations. Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance).)

5.	What is the standard direct labor rate per hour?

6.	What was the labor rate variance for March? The labor efficiencyvariance? (Do not round your intermediate calculations.Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance))

7.	What was the variable overhead rate variance for March? Thevariable overhead efficiency variance? (Do not roundintermediate calculations. Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance))

8.	Prepare a standard cost card for one backpack. (Roundyour answers to 2 decimal places.)