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

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

Adamantane 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 15,000 units of product were as follows:

Standard Costs Actual Costs
Direct materials 5,000 lbs. at $50.00 4,950 lbs. at $50.60
Direct labor 3,000 hrs. at $25.00 2,945 hrs. at $25.60
Factory overhead Rates per direct labor hr.,
based on 100% of normal
capacity of 3,200 direct
labor hrs.:
Variable cost, $5.50 $16,680 variable cost
Fixed cost, $4.00 $12,800 fixed cost

Each unit requires 0.2 hour of direct labor.

Required:

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance, b. the direct labor rate variance, direct labor time variance, and total direct labor cost variance,c. 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.

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