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 $7,600$ units of product were as follows:

Standard Costs Actual Costs

Direct materials $9,900$ lb$.$ at $$5\mathrm{.}009,800$ lb$.$ at $$4\mathrm{.}90$

Direct labor $1,900$ hrs$.$ at $$17\mathrm{.}301,940$ hrs$.$ at $$17\mathrm{.}70$

Factory overhead Rates per direct labor hr$.,$

based on $100\%$ of normal

capacity of $1,980$ direct

labor hrs$.$:

Variable cost, $$3\mathrm{.}00$ $$5,640$ variable cost

Fixed cost, $$4\mathrm{.}70$ $$9,306$ 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.

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.