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 40,000 units of product were as follows:

standard costs actual costs
direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25
direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00
factory overhead rates per direct labor hr.,
based on 100% of normal
capacity of 15,000 direct
labor hrs.:
variable cost, $8.00 $91,200 variable cost
fixed cost, $10.00 $150,000 fixed cost
each unit requires 0.3 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.

price variance $
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.

rate variance $
time variance $
total direct labor cost variance $
c. determine the variable factory overhead controllable variance, 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 $

Instructions are listed below.

Explanation:

Giving the following information:

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 40,000 units of product were as follows:

Standard Costs - Actual Costs

Direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25

Direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00

Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.:

Variable cost, $8.00 $91,200 variable cost

Fixed cost, $10.00 $150,000 fixed cost

Each unit requires 0.3 hour of direct labor.

A) Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (3.20 - 3.25)*118,500= $5925 unfavorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (120,000 - 118,500)*3.20=-$4,800 favorable

Total direct material variance= 5,925 - 4,800= 1,125 unfavorable

B)Direct labor efficiency variance= (SQ - AQ)*standard rate

Direct labor efficiency variance= (12,000 - 11,700)*24.40= -$7,320 favorable

Direct labor price variance= (SR - AR)*AQ

Direct labor price variance= (24.40 - 25)*11,700= $7,020 unfavorable

Total direct labor variance= $300 favorable

C) Variable factory overhead controllable variance= (8*15,000 - 92,100)= -$27,900 favorable

Fixed factory overhead volume variance= (10*15,000 - 150,000)= 0

Total factory overhead variance= 27,900 favorable

send the charted data

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