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 $