Direct Materials, Direct Labor, and Factory Overhead CostVariance Analysis

Mackinaw Inc. processes a base chemical into plastic. Standardcosts and actual costs for direct materials, direct labor, andfactory overhead incurred for the manufacture of 4,800 units ofproduct were as follows:

	Standard Costs		Actual Costs
Direct materials	6,200 lb. at $4.90		6,100 lb. at $4.80
Direct labor	1,200 hrs. at $16.70		1,230 hrs. at $17.10
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,250 direct
	labor hrs.:
		Variable cost, $4.50	$5,350 variable cost
		Fixed cost, $7.10	$8,875 fixed cost

Each unit requires 0.25 hour of direct labor.

Required:

a. Determine the direct materials pricevariance, direct materials quantity variance, and total directmaterials cost variance. Enter a favorable variance as a negativenumber using a minus sign and an unfavorable variance as a positivenumber.

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 signand an unfavorable variance as a positive number.

Direct labor rate variance	$
Direct labor time variance
Total direct labor cost variance	$

c. Determine variable factory overheadcontrollable variance, the fixed factory overhead volume variance,and total factory overhead cost variance. Enter a favorablevariance as a negative number using a minus sign and an unfavorablevariance as a positive number.

Variable factory overhead controllable variance	$
Fixed factory overhead volume variance
Total factory overhead cost variance	$