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Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the
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 78,000 units of product were as follows: Standard Costs Direct materials Direct labor 218,400 lbs. at $5.10 19,500 hrs. at $17.00 Actual Costs 216,200 lbs. at $4.90 19,950 hrs. at $17.40 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: Variable cost, $2.80 $54,050 variable cost Fixed cost, $4.40 $89,540 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 Material Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance -43,240 -11,220 -54,460 Favorable Favorable Favorable 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 Direct Labor Time Variance Total Direct Labor Cost Variance 7,800 X Unfavorable 7,650 Unfavorable 15,450 X Unfavorable 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 -550 Favorable 1,980 X Unfavorable 1,430 X Unfavorable
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