Question

# Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical...

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 5,200 units of product were as follows:

 Standard Costs Actual Costs Direct materials 6,800 lb. at \$6.00 6,700 lb. at \$5.90 Direct labor 1,300 hrs. at \$16.50 1,330 hrs. at \$16.80 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,360 direct labor hrs.: Variable cost, \$3.50 \$4,500 variable cost Fixed cost, \$5.50 \$7,480 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 materials price variance \$ Direct materials quantity variance Total direct materials cost variance \$

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 \$

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 \$