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nments&takeAssignmentsessionLocator-assignment-take;&inprogress-false; Direct s, Direct Labor, and Factory 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 7,600 units of product were as follows: Standard Costs Actual Costs 9,800 lb. at $5.20 Direct materials 9,900 tb. at $5.40 Direct labor Factory overheadRates per direct labor hr. 1,900 hrs, at $16.50 1,940 hrs. at $16.80 based on 100% of normal capacity of 1,980 direct labor hrs.: Variable cost, $3.40 $6.400 variable cost Fixed cost, ss 40 Each unit requires 0.25 hour of direct labor Required: negative number using a minus sign and an unfavorable variance as a ppsitive number as a Quantity variance

Solution

a) Direct material price variance = (Actual price-Standard price)*Actual quantity purchased = = (5.20-5.40)*9800 = -1960 Favorable Direct material quantity variance = (Actual quantity used-Standard quantity)*Standard price = (9800-9900)*5.40 = -540 Favorable Total direct materials cost variance = DM price variance+DM quantity variance = -1960-540 = -2500 Favorable b) Direct labor rate variance = (Actual rate-Standard rate)*Actual DLH = (16.80-16.50)*1940 = 582 Unfavorable Direct labor time variance = (Actual DLH-Standard DLH)*Standard rate = (1940-1900)*16.50 = 660 Unfavorable Total direct labor cost variance = DL price variance+DL time variance = 582+660 = 1242 Unfavorable c) Variable factory overhead controllable variance = Actual variable factory overhead-Standard hours for actual production * Standard variable overhead rate = 6400-1900*3.4 = -60 Favorable Fixed factory overhead volume variance = Budgeted overhead-Standard hours for actual production*Standard overhead rate = 1980*5.40-1900*5.40 = 432 Unfavorable Fixed factory overhead expenditure variance =Actual fixed overhead-Budgeted fixed overhead = 10692-1980*5.4 = 0 Total factory overhead cost variance = -60+432+0 = 372 Unfavorable