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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

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 199,800 lbs. at $6.00 197,800 lbs. at $5.80
Direct labor 18,500 hrs. at $16.30 18,930 hrs. at $16.60
Factory overhead Rates per direct labor hr.,
based on 100% of normal
capacity of 19,310 direct
labor hrs.:
Variable cost, $3.10 $56,780 variable cost
Fixed cost, $4.90 $94,619 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.

Direct Materials Price Variance $fill in the blank 1

FavorableUnfavorable

Direct Materials Quantity Variance $fill in the blank 3

FavorableUnfavorable

Total Direct Materials Cost Variance $fill in the blank 5

FavorableUnfavorable

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.

Direct Labor Rate Variance $fill in the blank 7

FavorableUnfavorable

Direct Labor Time Variance $fill in the blank 9

FavorableUnfavorable

Total Direct Labor Cost Variance $fill in the blank 11

FavorableUnfavorable

c. Determine 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.

Variable factory overhead controllable variance $fill in the blank 13

FavorableUnfavorable

Fixed factory overhead volume variance $fill in the blank 15

FavorableUnfavorable

Total factory overhead cost variance $fill in the blank 17

FavorableUnfavorable

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