Chapter 23 Evaluating Variances from Standard Costs 1165 PR 23-38 Direct materials, direct labor, and factory overhead cost variance 08J.3, 4 analysis Road Gripper Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 4,160 tires were as follows: ect materials Actual Costs 101,000 lb, at $6.50 2,000 hrs, at $15.40 Standard Costs Direct materials Direct labor Factory overhead 100,000 lb. at $6.40 2,080 hrs. at $15.75 Rates per direct labor hr. based on 100% of normal capacity of 2,000 direct labor hrs. oel Variable cost, $4.00 Fixed cost, $6.00 $8,200 variable cost $12,000 fixed cost Each tire requires 0.5 hour of direct labor. Instructions Determine (a) the direct materials price varance, direct materials quantity variance, and total direct materials cost variance; (b) the ance, and total direct labor cost variance the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. 1abor rate variance, direct labor time vari- PR 23-AB Factory overhead cost variance report OBJ. 4 PR 23-4B Factory overhead cost variance report ollable ,$(1,450) F OBJ. 4 Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capac- ity of 30,000 hours. xcel Variable costs: Indirect factory wages Power and light Indirect materials $247,500 189,000 52,500 eral ger Total variable cost $489,000 Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes $126,000 70,000 44,000 Total fixed cost Total factory overhead cost 240,000 $729,000 During October, the department operated at 28,500 hours. The factory overhead costs incurred were indirect factory wages, $234,000; power and light, $178,500; indirect materials, $50,600; supervisory salaries, $126,000; depreciation of plant and equipment, $70,000; and insurance and property taxes, $44,000. Instructions r for October. To be useful for cost control, Prepare a factory overhead cost variamesro the budgeted amounts should be based o 28,500 hours