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

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis
Santiago 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 70,000 units of product were as follows:
Line Item Description Standard Costs Actual Costs
Direct materials 224,000 lbs. at $4.60 per lb.221,800 lbs. at $4.40 per lb.
Direct labor 17,500 hrs. at $17.90 per hr.17,900 hrs. at $18.30 per hr.
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260 direct labor hrs.:
Factory overhead Variable cost, $3.30 $57,170 variable cost
Factory overhead Fixed cost, $5.20 $94,952 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.
Line Item Description Amount Variance
Direct Materials Price Variance $fill in the blank 1
Direct Materials Quantity Variance $fill in the blank 3
Total Direct Materials Cost Variance $fill in the blank 5
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.
Line Item Description Amount Variance
Direct Labor Rate Variance $fill in the blank 7
Direct Labor Time Variance $fill in the blank 9
Total Direct Labor Cost Variance $fill in the blank 11
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.
Line Item Description Amount Variance
Variable factory overhead controllable variance $fill in the blank 13
Fixed factory overhead volume variance $fill in the blank 15
Total factory overhead cost variance $fill in the blank 17

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