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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 78,000 units of product were as follows:
Direct materials
Direct labor
Factory overhead
Standard Costs
Required:
249,600 lbs. at $5.60
19,500 hrs. at $17.40
Rates per direct labor hr.,
based on 100% of normal
capacity of 20,350 direct
labor hrs.:
Variable cost, $3.60
Fixed cost, $5.70
Each unit requires 0.25 hour of direct labor.
A
Actual Costs
247,100 lbs. at $5.40
19,950 hrs. at $17.60
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
SA
$69,500 variable cost
$115,995 fixed cost](https://content.bartleby.com/qna-images/question/45a539d8-0175-49be-87b9-0888edd41698/2bcf442d-fbc5-4392-a59c-a7495ffa5cb4/psdvcwl_thumbnail.jpeg)
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:
Direct materials
Direct labor
Factory overhead
Standard Costs
Required:
249,600 lbs. at $5.60
19,500 hrs. at $17.40
Rates per direct labor hr.,
based on 100% of normal
capacity of 20,350 direct
labor hrs.:
Variable cost, $3.60
Fixed cost, $5.70
Each unit requires 0.25 hour of direct labor.
A
Actual Costs
247,100 lbs. at $5.40
19,950 hrs. at $17.60
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
SA
$69,500 variable cost
$115,995 fixed cost
![Variable cost, $3.60
Fixed cost, $5.70
Each unit requires 0.25 hour of direct labor.
Required:
$69,500 variable cost
$115,995 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](https://content.bartleby.com/qna-images/question/45a539d8-0175-49be-87b9-0888edd41698/2bcf442d-fbc5-4392-a59c-a7495ffa5cb4/bchuems_thumbnail.jpeg)
Transcribed Image Text:Variable cost, $3.60
Fixed cost, $5.70
Each unit requires 0.25 hour of direct labor.
Required:
$69,500 variable cost
$115,995 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
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- Which one of the following best describes the direct material price variance? O a. The difference between the standard quantity of material used at the standard cost per unit and the actual quantity of material used at the standard direct material cost per unit O b. The difference between the budgeted material cost and direct material cost according to the unflexed budget O c. The difference between the actual direct material cost and direct material cost according to the flexed budget O d. The difference between the actual cost of the material used and the actual quantity of material used at the standard direct material cost per unit O e. The difference between the actual cost of the material used and the standard quantity of material used at the actual direct material cost per unitarrow_forwardPlease do not give solution in image format thankuarrow_forwardWhich of the following is a correct equation to calculate the fixed overhead production-volume variance? a. budgeted fixed overhead costs − fixed overhead costs allocated for actual output b. static budget amount − flexible budget amount c. actual costs incurred − fixed overhead costs allocated for actual output d. flexible budget amount − actual costs incurredarrow_forward
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