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eBookPrint Item Question Content Area Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical into plastic. Standard costs
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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 materials, direct labor, and factory overhead incurred for the manufacture of units of product were as follows:
Standard Costs Actual Costs
Direct materials lb at $ lb at $
Direct labor hrs at $ hrs at $
Factory overhead Rates per direct labor hr
based on of normal
capacity of direct
labor hrs:
Variable cost, $ $ variable cost
Fixed cost, $ $ fixed cost
Each unit requires 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
Unfavorable
Direct materials quantity variance fill in the blank
Favorable
Total direct materials cost variance $fill in the blank
Unfavorable
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
Unfavorable
Direct labor time variance fill in the blank
Favorable
Total direct labor cost variance $fill in the blank
Favorable
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
Favorable
Fixed factory overhead volume variance fill in the blank
Unfavorable
Total factory overhead cost variance $fill in the blank
Unfavorable
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Unfavorable variances can be thought of as increasing costs a debit Favorable variances can be thought of as decreasing costs a credit
The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production.
The fixed factory overhead volume variance is the difference between the budgeted fixed overhead at of normal capacity and the standard fixed overhead for the actual units produced.
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