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Santiago Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the
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 78,000 units of product were as follows: Standard Costs Actual Costs 200,800 lbs. at $5.40 per lb. Direct materials Direct labor 202,800 lbs. at $5.60 per lb. 19,500 hrs. at $17.60 per hr. 19,950 hrs. at $18.00 per hr. Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: Variable cost, $4.30 Fixed cost, $6.80 Each unit requires 0.25 hour of direct labor. Required: $83,010 variable cost $138,380 fixed cost 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.
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