Homework SourseHighland Company produces a lightweight backpack that is pop
Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below:
$?
Overhead is applied to production on the basis of direct labor-hours. During March, 525 backpacks were manufactured and sold. Selected information relating to the month\'s production is given below:
What is the standard direct labor rate per hour? (Round your answer to 2 decimal places. Omit the \"$\" sign in your response.)
Standard variable manufacturing overhead cost for March ___________
Standard variable manufacturing overhead rate per direct labor-hour ___________
Standard direct labor-hours for March __________
Standard direct labor cost for March __________
Standard direct labor rate per hour ___________
What was the direct labor rate variance for March? The direct labor efficiency variance? (Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the \"$\" sign in your response.)
What was the variable overhead rate variance for March? The variable overhead efficiency variance?(Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the \"$\" sign in your response.)
Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
$_________
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost | |
| Direct materials | ? | $4.5 per yard | $? |
| Direct labor | ? | ? | ? |
| Variable manufacturing overhead | ? | $2 per direct labor-hour | ? |
| Total standard cost | $? | ||
Solution
(2)
Standard variable manufacturing overhead cost for March (A)
1470
Standard variable manufacturing overhead rate per direct labor-hour (B)
2
Standard direct labor-hours for March (C=A/B)
735 hrs
Standard direct labor cost for March (D)
5880
Standard direct labor rate per hour (D/C)
$ 8 per hour
(3)
Direct Labour Rate Variance
144(U)
Direct Labour Efficiency Variance
1320(U)
Labour Rate Variance :-
(Std Rate – Actual Rate) * Actual hrs
Actual Total cost per Back Pack = 31.80
Actual total cost of 525 Back pack – 525*31.80= 16695
Actual Labour cost = Actual total cost – Actual Material cost – Actual variable cost
= 16695 – 7700– 1650= 7345
Actual Rate per hr = 7345/900 hrs = 8.16
=( Std Rate – Actual Rate) * Actual hrs
=(8 – 8.16) * 900= 144(U)
Labour Efficiency Variance:-
(Std hrs – Actual hrs) * SR
(735 – 900) * 8 = 1320(U)
Standard cost of Single Backpack :-
Material (9450/525)
18
Labour (5880/525)
11.2
Variable O/H (1470/525)
2.8
Standard cost of Single Backpack
32
Actual cost of Single Backpack :-
Difference between standard and actual cost per backpack produced during March = 0.20 (F)
Actual cost of Single Backpack = 32 – 0.20 = 31.80
(4)
V. O/H Rate Variance
150(F)
V. O/H Efficiency Variance
330(U)
Variable O/H Rate Variance :-
(Std Rate – Actual Rate) * Actual hrs
Std Rate = 2 per hr
Actual rate = 1650 / 900 hrs = 1.83
=(2 – 1.83) * 900 = 150(F)
V. O/H Efficiency Variance:-
(Std hrs – Actual hrs) * SR
(735 – 900) * 2= 330(U)
(5) Std Cost card:-
Standard Quantity or
Hours
Standard Price or Rate
Standard Cost
Direct materials
4 yards
4.5 per yard
$ 18
Direct labor
1.4 hours
$8per hour
$ 11.2
Variable manufacturing overhead
1.4 hours
2.0 per hour
$ 2.8
Total standard cost
$ 32
| Standard variable manufacturing overhead cost for March (A) | 1470 |
| Standard variable manufacturing overhead rate per direct labor-hour (B) | 2 |
| Standard direct labor-hours for March (C=A/B) | 735 hrs |
| Standard direct labor cost for March (D) | 5880 |
| Standard direct labor rate per hour (D/C) | $ 8 per hour |
