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 $78,000$ units of product were as follows:

Standard Costs

Direct materials

Direct labor

Factory overhead

$210,600lbs.$ at $$5\mathrm{.}90$ per lb$.$

$19,500hrs,$ at $$16\mathrm{.}10$ per hr$.$

Rates per direct labor hr$.,$ based on $100\%$ of normal capacity of $20,350$ direct labor hrs$.$:

Variable cost, $$3\mathrm{.}00$

Fixed cost, $$4\mathrm{.}70$

Actual Costs

$208,500lbs,$ at $$5\mathrm{.}80$ per $lb.$

$19,950hrs.$ at $$16\mathrm{.}40$ per hr$.$

$$57,920$ variable cost

$$95,645$ 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

Favorable $$

Favorable $$

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

$

$

$

Unfavorable $$

Unfavorable $$

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 finfavorable variance as a positive number.