Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical...

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Direct Materials, Direct Labor, and Factory Overhead CostVariance Analysis Mackinaw Inc. processes a base chemical intoplastic. Standard costs and actual costs for direct materials,direct labor, and factory overhead incurred for the manufacture of4,800 units of product were as follows: Standard Costs Actual CostsDirect materials 6,200 lb. at $5.00 6,100 lb. at $4.80 Direct labor1,200 hrs. at $17.70 1,230 hrs. at $18.10 Factory overhead Ratesper direct labor hr., based on 100% of normal capacity of 1,250direct labor hrs.: Variable cost, $3.90 $4,630 variable cost Fixedcost, $6.20 $7,750 fixed cost Each unit requires 0.25 hour ofdirect 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 quantityvariance Total direct materials cost variance $ b. Determine thedirect labor rate variance, direct labor time variance, and totaldirect labor cost variance. Enter a favorable variance as anegative number using a minus sign and an unfavorable variance as apositive number. Direct labor rate variance $ Direct labor timevariance Total direct labor cost variance $ c. Determine variablefactory overhead controllable variance, the fixed factory overheadvolume variance, and total factory overhead cost variance. Enter afavorable variance as a negative number using a minus sign and anunfavorable variance as a positive number. Variable factoryoverhead controllable variance $ Fixed factory overhead volumevariance Total factory overhead cost variance $

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Part a
Standard Material Price $         5.00
Standard Quantity 6200
Actual Quantity 6100
Actual Quantity used 6100
Actual Matrial Price $         4.80
Material Price Variance AQ(AP-SP)
(Actual Price - Standard Price) * Actual Quantity
$                                   4.80 - $              5.00 * 6100
$                                 1,220 Favorbale
Material Quantity Variance SP(AQ-SQ)
(Actual Quantity - Standard Qty) * Standard Price
6100 - 6200 * $               5.00
$                                    500 Favorbale
Total Direct Material variance Price variance+Qty/Eff Var $       1,720 Favorable
Part b
Standard Hour Rate $       17.70
Standard Hour 1200
Actual Hours 1230
Actual Hour Rate $       18.10
Labor Rate Variance AH(AR-SR)
(Actual Rate - Standard Rate) * Actual Hours
$                                 18.10 - $            17.70 * 1230
$                                    492 Unfavorable
Labor Efficiency Variance SR(AH-SH)
(Actual Quantity - Standard Qty) * Standard Price
1230 - 1200 * $             17.70
$                                    531 Unfavorable
Total Direct Labor Varianve Rate Variance+Eff Variance $       1,023 Unfavorbale
Part c
Factory Overhead Cost Variance:
Variable Factory Overhead Controllable Variance:
Actual Variable Factory Overhead $       4,630
Budgeted Variable Factory Overhead 1,200 Hours*$3.90 $       4,680
Variance - Favorable A $       9,310
Fixed Factory overhead Volume Variance:
Normal capacity 100%           1,250 Hours
Less: Standard for amount produced $      -1,200
Productive capacity not used $            50
Standard Fixed Factory ovh rate $         6.20
Variance -Unfavorable B $          310
Toal Factory Overhead Variance-Favorable A-B $       9,000

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