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 78,000 units of product were as follows: Direct materials Direct labor Factory overhead Standard Costs 195,000 lbs. at $5.20 19,500 hrs. at $16.70 Rates per direct labor hr based on 100% of normal Actual Costs 193,100 lbs. at $5.00 19,950 hrs. at $17.10 capacity of 20,350 direct labor hrs: Variable cost, $3.60 $69,500 vanable cost Fixed cost, $5.70 $115,995 foxed cost Each unit requires 0.25 hour of direct labor