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 40,000 units of product were as follows: Standard Costs Actual Costs Direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25 Direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.: Variable cost, $8.00 $91,200 variable cost Fixed cost, $10.00 $150,000 fixed cost Each unit requires 0.3 hour of direct labor. 1. Determine (a) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; 2. (b) the direct labor rate variance, direct labor time variance, and total direct labor cost variance
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 40,000 units of product were as follows: Standard Costs Actual Costs Direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25 Direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.: Variable cost, $8.00 $91,200 variable cost Fixed cost, $10.00 $150,000 fixed cost Each unit requires 0.3 hour of direct labor. 1. Determine (a) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; 2. (b) the direct labor rate variance, direct labor time variance, and total direct labor cost variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text: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 40,000 units of product were as follows:
Standard Costs
Actual Costs
Direct materials
120,000 lb. at $3.20
118,500 lb. at
$3.25
Direct labor
12,000 hrs. at $24.40
11,700 hrs. at
$25.00
Factory
overhead
Rates per direct labor hr.,
based on 100% of normal
capacity of 15,000 direct labor
hrs.:
Variable cost, $8.00
$91,200 variable
cost
Fixed cost, $10.00
$150,000 fixed
cost
Each unit requires 0.3 hour of direct labor.
1. Determine (a) the direct materials price variance, direct materials quantity variance, and total direct materials cost
variance;
2. (b) the direct labor rate variance, direct labor time variance, and total direct labor cost variance
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education