Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis 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 numberusing a minus sign and an unfavorable variance as a positive number.Direct materials price varianceDirect materials quantity varianceTotal direct materials cost variance$b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus signand an unfavorable variance as a positive number.Direct labor rate variance$Direct labor time varianceTotal direct labor cost variancec. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance asa negative number using a minus sign and an unfavorable variance as a positive number.Variable factory overhead controllable variance$Fixed factory overhead volume varianceTotal factory overhead cost variance 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 the manufacture of7,200 units of product were as follows:Standard CostsActual CostsDirect materials9,400 lb. at $5.209,300 Ib. at $5.00Direct labor1,800 hrs. at $16.101,840 hrs. at $16.30Factory overheadRates per direct labor hr.,based on 100% of normalcapacity of 1,880 directlabor hrs.:Variable cost, $4.30$7,660 variable costFixed cost, $6.80$12,784 fixed costEach unit requires 0.25 hour of direct labor.

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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 Ib. at $5.20 9,300 Ib. at $5.00 Direct labor 1,800 hrs. at $16.10 1,840 hrs. at $16.30 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,880 direct labor hrs.: Variable cost, $4.30 $7,660 variable cost Fixed cost, $6.80 $12,784 fixed cost Each unit requires 0.25 hour of direct labor.

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 Ib. at $5.20 9,300 Ib. at $5.00 Direct labor 1,800 hrs. at $16.10 1,840 hrs. at $16.30 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,880 direct labor hrs.: Variable cost, $4.30 $7,660 variable cost Fixed cost, $6.80 $12,784 fixed cost Each unit requires 0.25 hour of direct labor.

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

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.
Direct labor rate variance
$
Direct labor time variance
Total direct labor cost variance
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
$
Fixed factory overhead volume variance
Total factory overhead cost variance

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

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