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: Standard Costs Direct materials Direct labor Factory overhead 218,400 lbs. at $5.40 19,500 hrs. at $17.00 Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: Variable cost, $2.80 Fixed cost, $4.40 Each unit requires 0.25 hour of direct labor. Required: Actual Costs 216,200 lbs. at $5.30 19,950 hrs. at $17.40 $54,050 variable cost $89,540 fixed cost a. Determine the direct materials price variance, direct materials quantity variance, and total number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance irect materials cost variance. Enter a favorable variance as a negative
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: Standard Costs Direct materials Direct labor Factory overhead 218,400 lbs. at $5.40 19,500 hrs. at $17.00 Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: Variable cost, $2.80 Fixed cost, $4.40 Each unit requires 0.25 hour of direct labor. Required: Actual Costs 216,200 lbs. at $5.30 19,950 hrs. at $17.40 $54,050 variable cost $89,540 fixed cost a. Determine the direct materials price variance, direct materials quantity variance, and total number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance irect materials cost variance. Enter a favorable variance as a negative
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3PA: Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes...
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
8
![Fixed cost, $4.40
Each unit requires 0.25 hour of direct labor.
Required:
$89,540 fixed cost
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
Direct Materials Quantity Variance
Total Direct Materials Cost Variance
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
Direct Labor Time Variance
Total Direct Labor Cost Variance
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
Fixed factory overhead volume variance
Total factory overhead cost variance
Accounting numeric field](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F45a539d8-0175-49be-87b9-0888edd41698%2F4afe904b-ae0d-4b89-9b09-e01ff0597b49%2Fi0h2xbi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Fixed cost, $4.40
Each unit requires 0.25 hour of direct labor.
Required:
$89,540 fixed cost
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
Direct Materials Quantity Variance
Total Direct Materials Cost Variance
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
Direct Labor Time Variance
Total Direct Labor Cost Variance
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
Fixed factory overhead volume variance
Total factory overhead cost variance
Accounting numeric field
![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:
Standard Costs
Direct materials
Direct labor
Factory overhead
218,400 lbs. at $5.40
19,500 hrs. at $17.00
Rates per direct labor hr.,
based on 100% of normal
capacity of 20,350 direct
labor hrs.:
Variable cost, $2.80
Fixed cost, $4.40
Each unit requires 0.25 hour of direct labor.
Required:
Actual Costs
216,200 lbs. at $5.30
19,950 hrs. at $17.40
$54,050 variable cost
$89,540 fixed cost
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
Direct Materials Quantity Variance
Total Direct Materials Cost Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F45a539d8-0175-49be-87b9-0888edd41698%2F4afe904b-ae0d-4b89-9b09-e01ff0597b49%2Fg80v5ts_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Standard Costs
Direct materials
Direct labor
Factory overhead
218,400 lbs. at $5.40
19,500 hrs. at $17.00
Rates per direct labor hr.,
based on 100% of normal
capacity of 20,350 direct
labor hrs.:
Variable cost, $2.80
Fixed cost, $4.40
Each unit requires 0.25 hour of direct labor.
Required:
Actual Costs
216,200 lbs. at $5.30
19,950 hrs. at $17.40
$54,050 variable cost
$89,540 fixed cost
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
Direct Materials Quantity Variance
Total Direct Materials Cost Variance
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