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: Direct materials Direct labor Factory overhead Standard Costs 210,600 lbs. at $5.90 19,500 hrs. at $17.40 Rates per direct labor hr., based on 100% of normal Actual Costs 208,500 lbs. at $5.80 19,950 hrs. at $17.80. capacity of 20,350 direct labor hrs.: Variable cost, $4.70 $90,730 variable cost Fixed cost, $7.40 $150,590 fixed cost Each unit requires 0.25 hour of direct labor.