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. 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 sign and an unfavorable variance as a positive number. Direct labor rate variance $   Direct labor 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.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3PA: Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes...
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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.

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 sign and an unfavorable variance as a positive number.

Direct labor rate variance $  
Direct labor 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 $  
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