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Highland Company produces a lightweight backpack. Standard variable costs per backpack are as follows:

Direct materials: $4.00 per yard

Direct labor: $2.00 per direct labor-hour

Variable manufacturing overhead: $2.00 per direct labor-hour
During March, 420 backpacks were manufactured and sold. Actual costs incurred and selected information for the month's production are provided. Answer the following questions:

What is the standard cost of a single backpack?
a. $16.00
b. $18.00
c. $20.00
d. $22.00

User Rkenmi
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1 Answer

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Final answer:

Without specific information on the number of yards of materials and labor-hours per backpack, it is impossible to accurately calculate the standard cost of a single backpack from the provided options.

Step-by-step explanation:

The standard cost of a single backpack produced by Highland Company is calculated by summing the standard variable costs for direct materials, direct labor, and variable manufacturing overhead. The sum of these costs for one backpack is:

  • Direct materials: $4.00 per yard
  • Direct labor: $2.00 per direct labor-hour
  • Variable manufacturing overhead: $2.00 per direct labor-hour

To find the standard cost of a single backpack, we would simply add these figures together:

$4.00 (direct materials) + $2.00 (direct labor) + $2.00 (variable manufacturing overhead) = $8.00

However, to select the correct answer from the given options, we need to evaluate if there is missing information that would modify the total cost. Unfortunately, without the specific number of yards and lab labor hours backpack, we cannot determine if the presented total is correct. The given options (a. $16.00, b. $18.00, c. $20.00, and d. $22.00) all suggest there is additional information we are not given, such as the number of yards or labor hours required per backpack. Due to incomplete data, we are unable to choose the right answer.

User Moran Reznik
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