1 Standard cost for March production: Materials $16,800 Direct labor 10,500 Variable manufacturing overhead $4,200 Total standard cost (a) $31,500 Number of backpacks produced (b) 1,000 Standard cost of a single backpack (a) ÷ (b) $31.50 2 Standard cost of a single backpack (above) $31.50 Deduct difference between standard and actual cost 0.15 Actual cost per backpack $31.35 3 Total standard cost of materials allowed during March (a) $16,800 Number of backpacks produced during March (b) 1,000 Standard materials cost per backpack (a) ÷ (b) $16.80 4 Standard cost of material used $16,800 Actual cost of material used 15000 Total variance $1,800 Favorable The price and quantity variances together equal the total variance. If the quantity variance is $1,200 U, then the price variance must be $3,000 F: Price variance $ 3,000 F Quantity variance U
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