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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 6,000 units of product were as follows Actual Costs Standard Costs 7,800 lb. at $5.70 Direct materals Direct labor 7,700 lb at $5.50 1,530 hes at $16.70 1,500 hrs at $16.40 Factory Overhead Rates per direct labore based on 100% of normal capacity of 1,560 direct laboris Variable cost, $2.00 Fixed cost, 54.40 $4,160 variable cost $6,864 fixed cost Each unit roures 0.25 hour of direct labor Required: a. Determine the direct materassic Vinance direct materials quantity vanaand total direct materials cost variance Enter a favorable variance as a negative numbering minusson and an unfavorable vanance as a positivt number Direct materascevance 1,540 Lavorable Direct materials quantity Venance 570 Lavorable - Total direct materials cost variance 2,110 Favorable Unfavorable variance as a positive number Variable factory overhead controllable variance -2,440 X favorable Fixed factory overhead volume vananen 2,964 X Unfavorable Total factory overhead cost vanance 524 X Unfavorable Check ou Unfavorable variances can be thought of using costs a debut) vorable vanances can be thought of a decreasing costs (acredit) The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production Me fixed story overhead Volume variance is the difference between the budgeted feed overhead at 100% of normal capacity and the standard fixed overhed for the actual units produced

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