Problem 9-26 (Static) Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6]

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 HoursStandard Price or RateStandard CostDirect materials?$ 6per yard$ ?Direct labor?? ?Variable manufacturing overhead?$ 3per direct labor-hour?Total standard cost per unit $ ?

Overhead is applied to production on the basis of direct labor-hours. During March, 1,000 backpacks were manufactured and sold. Selected information relating to the months production is given below:

Materials UsedDirect LaborVariable Manufacturing OverheadTotal standard cost allowed*$ 16,800 $ 21,000$ 4,200Actual costs incurred$ 15,000 ?$ 3,600Materials price variance? Materials quantity variance$ 1,200U 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 Marchs production:

Actual direct labor-hours1,500 Difference between standard and actual cost per backpack produced during March$ 0.15F

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?

Material price variance_______$ Material quantity variance_______$ Spending variance_______

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

6. What was the labor rate variance for March? The labor efficiency variance?

Labor rate variance______ Labor efficiency variance_______

7. What was the variable overhead rate variance for March? The variable overhead efficiency variance?

Variable overhead variance______$ Variable overhead efficiency variance______

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

-Direct materials______Yards 6$ per yard_______ standard cost

-Direct labor______hours _____$ per hour_______ standard cost

-Variable manufactoring overhead_______hours 3$ per hour_______ standard cost

8. Prepare a standard cost card for one backpack.