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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 6,800 units of product were as follows: Standard Costs Actual Costs Direct materials 8,800 lb. at $4.70 Direct labor Factory overheadRates per direct labor hr., 8,700 lb. at $4.50 1,700 hrs. at $17.10 1,740 hrs. at $17.30 based on 100% of normal capacity of 1,770 direct labor hrs.: $6,560 variable cost $10,974 fixed cost Variable cost, $3.90 Fixed cost, $6.20 Each unit requires 0.25 hour of direct labor