Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes a base chemical into the 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 lbs. at $3.20 per lb. 118,500 lbs. at $3.25 per lb.
Direct labor 12,000 hrs. at $24.40 per hr. 11,700 hrs. at $25.00 per hr
Factory overhead Rates per direct labor hr,
based on 100% of normal
the 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 hours of direct labor
instructions
Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance;(B) the direct labor rate variance ,direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.