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

Eastern Polymers, 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 6,800 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	9,500 lbs. at $5.70		9,400 lbs. at $5.60
Direct labor	1,700 hrs. at $17.60		1,740 hrs. at $17.90
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,770 direct
	labor hrs.:
		Variable cost, $4.30	$7,240 variable cost
		Fixed cost, $6.80	$12,036 fixed cost

Each unit requires 0.25 hour of direct labor.

Required:

c. Determine variable factory overhead controllable variance, the 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	$	SelectFavorableUnfavorableItem 14
Fixed factory overhead volume variance	$	SelectFavorableUnfavorableItem 16
Total factory overhead cost variance	$	SelectFavorableUnfavorable