Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Eastern Polymers, Inc., processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 5,200 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	7,300 lbs. at $5.30		7,200 lbs. at $5.20
Direct labor	1,300 hrs. at $16.20		1,330 hrs. at $16.60
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,360 direct
	labor hrs.:
		Variable cost, $4.40	$5,660 variable cost
		Fixed cost, $7.00	$9,520 fixed cost

Each unit requires 0.25 hour of direct labor.

PLEASE SHOW CALCULATIONS IF POSSIBLE

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Price variance	$	SelectFavorableUnfavorableItem 2
Quantity variance	$	SelectFavorableUnfavorableItem 4
Total direct materials cost variance	$	SelectFavorableUnfavorableItem 6

b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Rate variance	$	SelectFavorableUnfavorableItem 8
Time variance	$	SelectFavorableUnfavorableItem 10
Total direct labor cost variance	$	SelectFavorableUnfavorableItem 12

c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variable factory overhead controllable variance	$	SelectFavorableUnfavorableItem 14
Fixed factory overhead volume variance	$	SelectFavorableUnfavorableItem 16
Total factory overhead cost variance	$	SelectFavorableUnfavorable Item 18