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 7,200 units of product were as follows:   Standard Costs Actual Costs Direct materials 9,400 lb. at $4.80 9,300 lb. at $4.60 Direct labor 1,800 hrs. at $18.30 1,840 hrs. at $18.60 Factory overhead Rates per direct labor hr.,     based on 100% of normal     capacity of 1,880 direct     labor hrs.:       Variable cost, $3.60 $6,420 variable cost     Fixed cost, $5.70 $10,716 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 materials price variance $fill in the blank 1 Favorable/Unfavorable Direct materials quantity variance fill in the blank 3 FavorableUnfavorable Total direct materials cost variance $fill in the blank 5 FavorableUnfavorable   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.   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.

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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 7,200 units of product were as follows:

  Standard Costs Actual Costs
Direct materials 9,400 lb. at $4.80 9,300 lb. at $4.60
Direct labor 1,800 hrs. at $18.30 1,840 hrs. at $18.60
Factory overhead Rates per direct labor hr.,  
  based on 100% of normal  
  capacity of 1,880 direct  
  labor hrs.:  
    Variable cost, $3.60 $6,420 variable cost
    Fixed cost, $5.70 $10,716 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 materials price variance $fill in the blank 1

Favorable/Unfavorable

Direct materials quantity variance fill in the blank 3

FavorableUnfavorable

Total direct materials cost variance $fill in the blank 5

FavorableUnfavorable

 

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.

 

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.

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