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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 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials Direct labor Factory overhead 207,200 lbs. at $4.80 18,500 hrs. at $18.70 Rates per direct labor hr., based on 100% of normal 205,100 lbs. at $4.60 18,930 hrs. at $18.90 capacity of 19,310 direct labor hrs.: Variable cost, $4.60 $84,250 variable cost Fixed cost, $7.30 $140,963 fixed cost Each unit requires 0.25 hour of direct labor.
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