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

Santiago 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 $78,000$ units of product were as follows:

Standard Costs

Direct materials

Direct labor

Factory overhead

Actual Costs

$193,100$ lbs$.$ at $$4\mathrm{.}90$ per lb$.$

$19,950$ hrs$.$ at $$16\mathrm{.}90$ per hr$.$

Rates per direct labor hr$,$ based on $100\%$ of normal

capacity of $20,350$ direct labor hrs$.$:

Variable cost, $$4\mathrm{.}80$

$$92,660$ variable cost

Fixed cost, $$7\mathrm{.}60$

$$154,660$ fixed cost

Each unit requires $0\mathrm{.}25$ 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

Direct Materials Quantity Variance

$

Total Direct Materials Cost Variance

$

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

Direct Labor Time Variance

Total Direct Labor Cost Variance

s

$

$

c$.$ Determine the variable factory overhead controllable variance, 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

Fixed factory overhead volume variance

Total factory overhead cost variance