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

Mackinaw 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 7,200 units of product were as follows:

Standard CostsActual CostsDirect materials9,400 lb. at $5.509,300 lb. at $5.40Direct labor1,800 hrs. at $18.201,840 hrs. at $18.60Factory overheadRates per direct labor hr., based on 100% of normal capacity of 1,880 direct labor hrs.: Variable cost, $4.10$7,310 variable cost Fixed cost, $6.50$12,220 fixed cost

Each unit requires 0.25 hour of direct labor.

Required:

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.

Direct materials price variance$fill in the blank 1FavorableUnfavorableDirect materials quantity variancefill in the blank 3FavorableUnfavorableTotal direct materials cost variance$fill in the blank 5FavorableUnfavorable

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.

Direct labor rate variance$fill in the blank 7FavorableUnfavorableDirect labor time variancefill in the blank 9FavorableUnfavorableTotal direct labor cost variance$fill in the blank 11FavorableUnfavorable

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$fill in the blank 13FavorableUnfavorableFixed factory overhead volume variancefill in the blank 15FavorableUnfavorableTotal factory overhead cost variance$fill in the blank 17FavorableUnfavorable