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 78,000 units of product were as follows:
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Standard Costs
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Actual Costs
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Direct materials |
202,800 lbs. at $5.30 |
200,800 lbs. at $5.10 |
Direct labor |
19,500 hrs. at $17.20 |
19,950 hrs. at $17.60 |
Factory overhead |
Rates per direct labor hr., |
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based on 100% of normal |
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capacity of 20,350 direct |
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labor hrs.: |
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Variable cost, $3.30 |
$63,710 variable cost |
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Fixed cost, $5.20 |
$105,820 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 |
$fill in the blank 1 |
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Direct Materials Quantity Variance |
$fill in the blank 3 |
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Total Direct Materials Cost Variance |
$fill in the blank 5 |
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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 7 |
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Direct Labor Time Variance |
$fill in the blank 9 |
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Total Direct Labor Cost Variance |
$fill in the blank 11 |
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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 |
$fill in the blank 13 |
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Fixed factory overhead volume variance |
$fill in the blank 15 |
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Total factory overhead cost variance |
$fill in the blank 17 |
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