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 70,000 units of product were as follows:
Standard Costs Actual Costs
Direct materials 231,000 lbs. at $4.90 228,700 lbs. at 4.80
DIrect labor 17,500 hrs. at $18.10 17,900 hrs. at 18.30
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260
Direct labor hrs.
Variable cost $4.40 $76,230 variable cost
Fixed cost $7.00 $127,820 fixed cost
Each unit requires 0.25 hour of direct labor.
Required:
a. Determine the direct materials price variance, direct materials quantity variance and total direct materials cost variance.
b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance and total factory overhead cost variance.