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 7,600 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	9,900 lbs. at $5.3		9,800 lbs. at $5.1
Direct labor	1,900 hrs. at $18.4		1,940 hrs. at $18.6
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,980 direct
	labor hrs.:
		Variable cost, $3.9	$7,340 variable cost
		Fixed cost, $6.2	$12,276 fixed cost

Each unit requires 0.25 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 Price variance Quantity variance Total direct materials cost variance 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 Rate variance Time variance Total direct labor cost variance 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 Fixed factory overhead volume variance Total factory overhead cost variance Favorable Favorable Favorable 1,960 X 530 X 2,490 388 736 1,124 Unfavorable Unfavorable Unfavorable 70 X Favorable 496 Unfavorable 426Unfavorable