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 4,400 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	5,700 lb. at $4.90		5,600 lb. at $4.70
Direct labor	1,100 hrs. at $18.70		1,130 hrs. at $19.00
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,150 direct
	labor hrs.:
		Variable cost, $3.80	$4,140 variable cost
		Fixed cost, $6.00	$6,900 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 $ Direct materials 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. Direct labor rate variance $ Direct labor time variance Total direct labor cost variance $ c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead variance. Enter a orable variance as a negative using a sign unfavorable variance as a positive number. Variable factory overhead controllable variance $ Fixed factory overhead volume variance Total factory overhead cost variance $