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Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Eastern Polymers, Inc., processes a base chemical into plastic. Standard costs and actual costs for

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Eastern Polymers, 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 5,600 units of product were as follows:

Standard Costs Actual Costs
Direct materials 7,300 lbs. at $5.80 7,200 lbs. at $5.60
Direct labor 1,400 hrs. at $17.70 1,430 hrs. at $18.20
Factory overhead Rates per direct labor hr.,
based on 100% of normal
capacity of 1,460 direct
labor hrs.:
Variable cost, $3.30 $4,570 variable cost
Fixed cost, $5.20 $7,592 fixed cost

Each unit requires 0.25 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.

Price variance $
Quantity variance $
Total direct materials cost variance $

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.

Rate variance $
Time variance $
Total direct labor cost variance $

c. Determine variable factory overhead controllable variance, the 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 $
Fixed factory overhead volume variance $
Total factory overhead cost variance $

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