.  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. Line Item Description Amount Variance Direct Materials Price Variance $fill in the blank 1   Direct Materials Quantity Variance $fill in the blank 3   Total Direct Materials Cost Variance $fill in the blank 5   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. Line Item Description Amount Variance Direct Labor Rate Variance $fill in the blank 7   Direct Labor Time Variance $fill in the blank 9   Total Direct Labor Cost Variance $fill in the blank 11   c.  Determine the variable factory overhead controllable variance, 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. Line Item Description Amount Variance Variable factory overhead controllable variance $fill in the blank 13   Fixed factory overhead volume variance $fill in the blank 15   Total factory overhead cost variance $fill in the blank 16

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

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 70,000 units of product were as follows:

Line Item Description Standard Costs Actual Costs
Direct materials 189,000 lbs. at $4.60 per lb. 187,100 lbs. at $4.40 per lb.
Direct labor 17,500 hrs. at $18.30 per hr. 17,900 hrs. at $18.70 per hr.
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260 direct labor hrs.:  
Factory overhead    Variable cost, $3.40 $58,910 variable cost
Factory overhead    Fixed cost, $5.40 $98,604 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.

Line Item Description Amount Variance
Direct Materials Price Variance $fill in the blank 1
 
Direct Materials Quantity Variance $fill in the blank 3
 
Total Direct Materials Cost Variance $fill in the blank 5
 

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.

Line Item Description Amount Variance
Direct Labor Rate Variance $fill in the blank 7
 
Direct Labor Time Variance $fill in the blank 9
 
Total Direct Labor Cost Variance $fill in the blank 11
 

c.  Determine the variable factory overhead controllable variance, 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.

Line Item Description Amount Variance
Variable factory overhead controllable variance $fill in the blank 13
 
Fixed factory overhead volume variance $fill in the blank 15
 
Total factory overhead cost variance $fill in the blank 16
 
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