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: Standard Costs Actual Costs 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
Direct Materials, Direct Labor, and
Mackinaw Inc. processes a base chemical into plastic.
| Standard Costs | Actual Costs | ||
| 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., | ||
| based on 100% of normal | |||
| capacity of 20,350 direct | |||
| labor hrs.: | |||
| Variable cost, $3.30 | $63,710 variable cost | ||
| 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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