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

Standard Costs Actual Costs

Direct materials $195,000$ lbs$.$ at $$4\mathrm{.}60193,100$ lbs$.$ at $$4\mathrm{.}50$

Direct labor $19,500$ hrs$.$ at $$16\mathrm{.}3019,950$ hrs$.$ at $$16\mathrm{.}60$

Factory overhead Rates per direct labor hr$.,$

based on $100\%$ of normal

capacity of $20,350$ direct

labor hrs$.$:

Variable cost, $$3\mathrm{.}50$ $$67,570$ variable cost

Fixed cost, $$5\mathrm{.}50$ $$111,925$ 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 $fill in the blank $1$

Direct Materials Quantity Variance $fill in the blank $3$

Total Direct Materials Cost Variance $fill in the blank $5$

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 $7$

Direct Labor Time Variance $fill in the blank $9$

Total Direct Labor Cost Variance $fill in the blank $11$

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 $fill in the blank $13$

Fixed factory overhead volume variance $fill in the blank $15$

Total factory overhead cost variance $fill in the blank $17$