Direct Materials, Direct Labor, and Factory Overhead Cost Variance AnalysisMackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for themanufacture of 78,000 units of product were as follows:Direct materialsDirect laborFactory overheadStandard CostsRequired:249,600 lbs. at $5.6019,500 hrs. at $17.40Rates per direct labor hr.,based on 100% of normalcapacity of 20,350 directlabor hrs.:Variable cost, $3.60Fixed cost, $5.70Each unit requires 0.25 hour of direct labor.AActual Costs247,100 lbs. at $5.4019,950 hrs. at $17.60a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negativenumber using a minus sign and an unfavorable variance as a positive number.Direct Materials Price VarianceDirect Materials Quantity VarianceTotal Direct Materials Cost VarianceSA$69,500 variable cost$115,995 fixed cost Variable cost, $3.60Fixed cost, $5.70Each unit requires 0.25 hour of direct labor.Required:$69,500 variable cost$115,995 fixed costa. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negativenumber using a minus sign and an unfavorable variance as a positive number.Direct Materials Price VarianceDirect Materials Quantity VarianceTotal Direct Materials Cost Varianceb. 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 aminus sign and an unfavorable variance as a positive number.Direct Labor Rate VarianceDirect Labor Time VarianceTotal Direct Labor Cost Variancec. Determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorablevariance as a negative number using a minus sign and an unfavorable variance as a positive number.Variable factory overhead controllable varianceFixed factory overhead volume varianceTotal factory overhead cost variance

Direct Material Price and efficiency variance Direct Material Price Variance = (The…

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 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. Variable factory overhead controllable variance Fixed factory overhead volume variance

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 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. Variable factory overhead controllable variance Fixed factory overhead volume variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1-What makes a variance favorable? Give an example of a favorable variance involving materials. What makes a variance unfavorable? Give an example of an unfavorable variance involving labor. 2-How do you balance a firm’s need to succeed and the need for not asking the workers for perfection? 3-What two components are needed to determine a standard for materials? 4-What makes a variance favorable? Give an example of a favorable variance involving materials. What makes a variance unfavorable? Give an example of an unfavorable variance involving labor.
A-1
When is the direcet labor time variance unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price paid is less than the standard price
Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $4.40 per pound) Direct labor (6 hours @ $14 per hour) Variable overhead (6 hours @ $8 per hour) Fixed overhead (6 hours @ $11 per hour) $ 132.00 84.00 48.00 66.00 $ 330.00 Standard cost per unit Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 50,000 units per quarter. The following additional information is available. Production (in units) Standard direct labor hours (6 DLH per unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead Operating Levels 70% 80% 90% 35,000 210,000 40,000 240,000 45,000 270,000 $ 2,640,000 $ 1,680,000 $ 2,640,000 $ 2,640,000 $ 1,920,000 $ 2,160,000 During the current quarter, the company operated at 90% of capacity and produced 45,000 units; actual direct labor totaled 266,000 hours. Units produced were assigned the following…
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Which one of the following best describes the direct material price variance? O a. The difference between the standard quantity of material used at the standard cost per unit and the actual quantity of material used at the standard direct material cost per unit O b. The difference between the budgeted material cost and direct material cost according to the unflexed budget O c. The difference between the actual direct material cost and direct material cost according to the flexed budget O d. The difference between the actual cost of the material used and the actual quantity of material used at the standard direct material cost per unit O e. The difference between the actual cost of the material used and the standard quantity of material used at the actual direct material cost per unit
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Which of the following is a correct equation to calculate the fixed overhead production-volume variance? a. budgeted fixed overhead costs − fixed overhead costs allocated for actual output b. static budget amount − flexible budget amount c. actual costs incurred − fixed overhead costs allocated for actual output d. flexible budget amount − actual costs incurred
Which of the following statements Is true? Multiple Choice The material quantity variance is recorded when overhead is applied to production. The material price and the material quantity variances are recorded at the same time., The materials quantity variance is recorded when materials are used in production. The materials quantity variance is recorded when materials are purchased.
1.What is the labor rate variance ( indicate the effect of each variance by selecting "f" for favorable, U for unfavorable, and None for no effect and round your final answer to the nearest whole number) 2. What is the variable overhead efficiency variance ? ( indicate the effect of each variance by selecting "f" for favorable, U for unfavorable, and None for no effect and round your final answer to the nearest whole number) 3. what is the variable overhead rate variance?
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