Actual Standard Costs Costs Direct |118,500 lb. 120,000 lb. at $3.20 materials at $3.25 Direct 11,700 hrs. 12,000 hrs. at $24.40 labor at $25.00 Factory Rates per direct labor hr based on 100% of overhead normal capacity of 15,000 direct labor hrs. $91,200 Variable cost, $8.00 variable cost $150,000 Fixed cost, $10.00 fixed cost

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Direct materials, direct labor, and factory overhead cost variance 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 40,000 units of product were as follows:

 

Each unit requires 0.3 hour of direct labor.
Instructions
Determine (a) the direct materials price variance, direct materials

quantity variance, and total direct materials cost variance; (b) the direct
labor rate variance, direct labor time variance, and total direct labor cost
variance; and (c) the variable factory overhead controllable variance,
fixed factory' overhead volume variance, and total factory overhead cost
variance.

Actual
Standard Costs
Costs
Direct
|118,500 lb.
120,000 lb. at $3.20
materials
at $3.25
Direct
11,700 hrs.
12,000 hrs. at $24.40
labor
at $25.00
Factory
Rates per direct labor hr based on 100% of
overhead normal capacity of 15,000 direct labor hrs.
$91,200
Variable cost, $8.00
variable
cost
$150,000
Fixed cost, $10.00
fixed cost
Transcribed Image Text:Actual Standard Costs Costs Direct |118,500 lb. 120,000 lb. at $3.20 materials at $3.25 Direct 11,700 hrs. 12,000 hrs. at $24.40 labor at $25.00 Factory Rates per direct labor hr based on 100% of overhead normal capacity of 15,000 direct labor hrs. $91,200 Variable cost, $8.00 variable cost $150,000 Fixed cost, $10.00 fixed cost
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