Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Eastern Polymers, 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 5,200 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	6,800 lbs. at $5.1		6,700 lbs. at $5
Direct labor	1,300 hrs. at $17.9		1,330 hrs. at $18.2
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,360 direct
	labor hrs.:
		Variable cost, $4.1	$5,280 variable cost
		Fixed cost, $6.5	$8,840 fixed cost

Each unit requires 0.25 hour of direct labor.

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.

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.

Rate variance	$
Time variance	$
Total direct labor cost variance	$

c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance.

Variable factory overhead controllable variance	$
Fixed factory overhead volume variance	$
Total factory overhead cost variance	$