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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

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 6,000 units of product were as follows:

Standard Costs Actual Costs
Direct materials 7,800 lb. at $5.30 7,700 lb. at $5.20
Direct labor 1,500 hrs. at $16.20 1,530 hrs. at $16.60
Factory overhead Rates per direct labor hr.,
based on 100% of normal
capacity of 1,560 direct
labor hrs.:
Variable cost, $4.70 $6,980 variable cost
Fixed cost, $7.40 $11,544 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.

Direct materials price variance $fill in the blank 1 FavorableUnfavorable
Direct materials quantity variance

fill in the blank 3

FavorableUnfavorable
Total direct materials cost variance $fill in the blank 5 FavorableUnfavorable

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.

Direct labor rate variance $fill in the blank 7 FavorableUnfavorable
Direct labor time variance

fill in the blank 9

FavorableUnfavorable
Total direct labor cost variance $fill in the blank 11 FavorableUnfavorable

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 $fill in the blank 13 FavorableUnfavorable
Fixed factory overhead volume variance

fill in the blank 15

FavorableUnfavorable
Total factory overhead cost variance $fill in the blank 17 FavorableUnfavorable

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