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

Santiago Inc. processes a base chemical into plastlc. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of $70,000$ units of product were as follows:

Standard Costs

Actual Costs

Direct materials $,189,000lbs.$ at $$5\mathrm{.}20$ per $lb.$

$187,100lbs.$ at $$5\mathrm{.}00$ per lb$.$

Direct labor $17,500hrs.$ at $$16\mathrm{.}10$ per hr$.17,900hrs.$ at $$16\mathrm{.}50$ per hr$.$

Factory overhead capacity of $18,260$ direct labor hrs$.$:

Variable cost, $$3\mathrm{.}80$ $$65,840$ variable cost

Fixed cost, $$6\mathrm{.}00$ $$109,560$ fixed cost

Each unit requires $0\mathrm{.}25$ 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 the variable factory overhead controllable variance, 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