Question
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
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 40,000 units of product were as follows:
Standard Costs | Actual Costs | ||
Direct materials | 120,000 lbs. at $3.20 per lb. | 118,500 lbs. at $3.25 per lb. | |
Direct labor | 12,000 hrs. at $24.40 per hr. | 11,700 hrs. at $25.00 per hr. | |
Factory overhead | Rates per direct labor hr., | ||
based on 100% of normal | |||
capacity of 15,000 direct | |||
labor hrs.: | |||
Variable cost, $8.00 | $91,200 variable cost | ||
Fixed cost, $10.00 | $150,000 fixed cost |
Each unit requires 0.3 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 Material Price Variance | $fill in the blank 1 | FavorableUnfavorable |
Direct Materials Quantity Variance | $fill in the blank 3 | FavorableUnfavorable |
Total Direct Materials Cost Variance | $fill in the blank 5 | FavorableUnfavorable |
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 | FavorableUnfavorable |
Direct Labor Time Variance | $fill in the blank 9 | FavorableUnfavorable |
Total Direct Labor Cost Variance | $fill in the blank 11 | FavorableUnfavorable |
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 | FavorableUnfavorable |
Fixed factory overhead volume variance | $fill in the blank 15 | FavorableUnfavorable |
Total factory overhead cost variance | $fill in the blank 17 | FavorableUnfavorable |
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