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	6,800 lbs. at $5.8		6,700 lbs. at $5.7
Direct labor	1,300 hrs. at $16.2		1,330 hrs. at $16.6
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,360 direct
	labor hrs.:
		Variable cost, $4.1	$5,280 variable cost
		Fixed cost, $6.5	$8,840 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.

Price variance	$	Favorable
Quantity variance	$	Favorable
Total direct materials cost variance	$	Favorable

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	$	Unfavorable
Time variance	$	Unfavorable
Total direct labor cost variance	$	Unfavorable

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	$	Favorable
Fixed factory overhead volume variance	$	Unfavorable
Total factory overhead cost variance	$	Unfavorable

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analys's Eastem Polymers, Inc., processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overmead incurred for the manufacture of 5.200 units of product were as follows: Standard Costs Actual Costs Direct materials Diract labor Factory overhead 6,800 lbs. at $3.8 1,300 hrs. at $16.2 Rates per d based on 100% of normal capacity of 1.360 direct labor hrs. 6.700 lbs. at $3.7 1.330 hrs. at $16.6 irect labor hr Variable cost, $4.1 Fixed cost, $6,5 $5,280 variable cost $8,840 fixed cost Each unit requires 0.25 hour of direct labor Required a. Detormine the diract materials prico variance, direct matorials quantity variance, and total direct matoriala cost variance. Enter a favorabla variance as a nagative number using a minus sign and an unfavorable variance as a positive number Price variance Quantity variance Total direct materials cost variance b. Determine the direct lebor 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 varience as a positive number Rate variance Time variance Total direct labor cost variance c. Determine varlable 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 Veriable factory overhesd controllable variance Fixed factory overhead volume variance Total factory overhead cost varianco Favorable Favorable Favorable Unfavorable Favorable Unfavorable