Highland Company produces a lightweight backpack that is popular with college students.Below are the standard variable costs
Question:
Highland Company produces a lightweight backpack that is popular with college students. Below are the standard variable costs associated with a single backpack:
Standard Quantity or Hour | Standard price or Evaluate | Standard Cost | |||||
Direct materials | ? | $ | 3.00 | per yard | $ | ? | |
direct labor | ? | ? | ? | ||||
Variable production load | ? | $ | 2 | directly per working hour | ? | ||
Total standard cost per unit | $ | ? | |||||
Overhead is applied directly to production on a labor-hours basis. During the month of March, 570 backpacks were produced and sold. Selected information on moon production is given below:
Materials Used | direct labor | Variable Generating overhead | |||||||
Allowed total standard cost* | $ | 8.550 | $ | 6.384 | $ | 1.596 | |||
Actual costs | $ | 6.080 | ? | $ | 2.812 | ||||
Material price difference | ? | ||||||||
Material quantity difference | $ | 570 | sen | ||||||
Labor rate difference | ? | ||||||||
Labor productivity difference | ? | ||||||||
Variable overhead rate variance | ? | ||||||||
Variable overhead efficiency variance | ? | ||||||||
*For monthly production.
The following additional information is available for March production:
Actual direct working hours | 855 | |||
Difference between standard and actual cost per backpack produced in March | $ | 0.20 | F | |
Requirements:
1. What is the standard cost of a single backpack?
2. What was the actual cost per backpack produced in March?
3. How many meters of material are required as standard per backpack?
4. If there were no starting and ending stocks of materials, what was the material price difference for March?
5. What is the standard rate of direct labor per hour?
6. What was the labor rate difference for March? Labor productivity variance?
7. What was the variable overhead rate variance for March? Variable overhead efficiency variance?
8. Prepare a standard cost card for a backpack.
Managerial Accounting for Managers
ISBN: 978-1259578540
4th edition
Authors: Eric Noreen, Peter Brewer, Ray Garrison