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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 74,000 units of product were as follows:

Standard CostsActual CostsDirect materials192,400 lbs. at $5.50190,500 lbs. at $5.30Direct labor18,500 hrs. at $17.8018,930 hrs. at $18.10Factory overheadRates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $4.60$84,250 variable cost Fixed cost, $7.30$140,963 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance$fill in the blank 1FavorableUnfavorableFavorableDirect Materials Quantity Variance$fill in the blank 3FavorableUnfavorableFavorableTotal Direct Materials Cost Variance$fill in the blank 5FavorableUnfavorableFavorable

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$fill in the blank 7FavorableUnfavorableUnfavorableDirect Labor Time Variance$fill in the blank 9FavorableUnfavorableUnfavorableTotal Direct Labor Cost Variance$fill in the blank 11FavorableUnfavorableUnfavorable

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$fill in the blank 13FavorableUnfavorableFavorableFixed factory overhead volume variance$fill in the blank 15FavorableUnfavorableUnfavorableTotal factory overhead cost variance$fill in the blank 17FavorableUnfavorableUnfavorable

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