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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 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 70,000 units of product were as follows: Direct materials Direct labor Standard Costs 203,000 lbs. at $6.00 17,500 hrs. at $17.80 Actual Costs 201,000 lbs. at $5.80 17,900 hrs. at $18.10 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260 direct labor hrs.: Variable cost, $2.90 $50,240 variable cost Fixed cost, $4.60 $83,996 fixed cost Each unit requires 0.25 hour of direct labor.
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