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 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials Direct labor Factory overhead 251,600 lbs. at $4.90 18,500 hrs. at $17.60 249,100 lbs. at $4.70 18,930 hrs. at $17.80 Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $4.50 $82,420 variable cost Fixed cost, $7.10 $137,101 fixed cost Each unit requires 0.25 hour of direct labor.