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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 74,000 units of product were as follows: Direct materials Direct labor 207,200 lbs. at $5.60 per lb. 18,500 hrs. at $18.00 per hr. Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $3.40 Fixed cost, $5.40 Each unit requires 0.25 hour of direct labor. Factory overhead Standard Costs Direct Labor Rate Variance Direct Labor Time Variance 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. Favorable $ $ Favorable Favorable Unfavorable Actual Costs 205,100 lbs. at $5.50 per lb. 18,930 hrs. at $18.40 per hr. Unfavorable Unfavorable $62,270 variable cost $104,274 fixed cost 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 Total factory overhead cost variance Favorable Unfavorable ✓ Unfavorable

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 74,000 units of product were as follows: Direct materials Direct labor 207,200 lbs. at $5.60 per lb. 18,500 hrs. at $18.00 per hr. Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $3.40 Fixed cost, $5.40 Each unit requires 0.25 hour of direct labor. Factory overhead Standard Costs Direct Labor Rate Variance Direct Labor Time Variance 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. Favorable $ $ Favorable Favorable Unfavorable Actual Costs 205,100 lbs. at $5.50 per lb. 18,930 hrs. at $18.40 per hr. Unfavorable Unfavorable $62,270 variable cost $104,274 fixed cost 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 Total factory overhead cost variance Favorable Unfavorable ✓ Unfavorable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 74,000 units of product were as follows: Direct materials Direct labor 207,200 lbs. at $5.60 per lb. 18,500 hrs. at $18.00 per hr. Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $3.40 Fixed cost, $5.40 Each unit requires 0.25 hour of direct labor. Factory overhead Required: Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost 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. Standard Costs Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance Favorable $ Favorable 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. $ Favorable Unfavorable Unfavorable Unfavorable 205,100 lbs. at $5.50 per lb. 18,930 hrs. at $18.40 per hr. Actual Costs $62,270 variable cost $104,274 fixed cost 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 Total factory overhead cost variance Favorable Unfavorable Unfavorable ✓
Transcribed Image Text: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 74,000 units of product were as follows: Direct materials Direct labor 207,200 lbs. at $5.60 per lb. 18,500 hrs. at $18.00 per hr. Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $3.40 Fixed cost, $5.40 Each unit requires 0.25 hour of direct labor. Factory overhead Required: Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost 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. Standard Costs Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance Favorable $ Favorable 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. $ Favorable Unfavorable Unfavorable Unfavorable 205,100 lbs. at $5.50 per lb. 18,930 hrs. at $18.40 per hr. Actual Costs $62,270 variable cost $104,274 fixed cost 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 Total factory overhead cost variance Favorable Unfavorable Unfavorable ✓
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