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eBook Print Item Question Content Area Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Santiago Inc. processes a base chemical into plastic. Standard
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Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis
Santiago 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:
Line Item Description | Standard Costs | Actual Costs |
---|---|---|
Direct materials | 192,400 lbs. at $4.90 per lb. | 190,500 lbs. at $4.70 per lb. |
Direct labor | 18,500 hrs. at $16.50 per hr. | 18,930 hrs. at $16.70 per hr. |
Factory overhead | Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: | |
Factory overhead | Variable cost, $3.10 | $56,780 variable cost |
Factory overhead | 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.
Line Item Description | Amount | Variance |
---|---|---|
Direct Materials Price Variance | $fill in the blank 1 | FavorableUnfavorableFavorable |
Direct Materials Quantity Variance | $fill in the blank 3 | FavorableUnfavorableFavorable |
Total Direct Materials Cost Variance | $fill in the blank 5 | FavorableUnfavorableFavorable |
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.
Line Item Description | Amount | Variance |
---|---|---|
Direct Labor Rate Variance | $fill in the blank 7 | FavorableUnfavorableUnfavorable |
Direct Labor Time Variance | $fill in the blank 9 | FavorableUnfavorableUnfavorable |
Total Direct Labor Cost Variance | $fill in the blank 11 | FavorableUnfavorableUnfavorable |
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.
Line Item Description | Amount | Variance |
---|---|---|
Variable factory overhead controllable variance | $fill in the blank 13 | FavorableUnfavorableFavorable |
Fixed factory overhead volume variance | $fill in the blank 15 | FavorableUnfavorableUnfavorable |
Total factory overhead cost variance |
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