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 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials 214,600 lbs. at $5.80 212,500 lbs. at $5.60 Direct labor 18,500 hrs. at $18.50 18,930 hrs. at $18.70 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: $78,750 variable cost