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 6,800 units of product were as follows:
| Standard Costs | Actual Costs | ||
| Direct materials | 8,800 lbs. at $4.70 | 8,700 lbs. at $4.50 | |
| Direct labor | 1,700 hrs. at $17.50 | 1,740 hrs. at $17.80 | |
| Factory overhead | Rates per direct labor hr., | ||
| based on 100% of normal | |||
| capacity of 1,770 direct | |||
| labor hrs.: | |||
| Variable cost, $3.50 | $5,890 variable cost | ||
| Fixed cost, $5.50 | $9,735 fixed cost | ||
Each unit requires 0.25 hour of direct labor.
Required:
a. Determine the price variance, quantity variance, and total direct materials cost variance. Use the minus sign to enter favorable variances as negative numbers.
| Price variance: | $ | SelectFavorableUnfavorableItem 2 |
| Quantity variance: | $ | SelectFavorableUnfavorableItem 4 |
| Total direct materials cost variance: | $ | SelectFavorableUnfavorableItem 6 |
b. Determine the rate variance, time variance, and total direct labor cost variance. Use the minus sign to enter favorable variances as negative numbers.
| Rate variance: | $ | SelectFavorableUnfavorableItem 8 |
| Time variance: | $ | SelectFavorableUnfavorableItem 10 |
| Total direct labor cost variance: | $ | SelectFavorableUnfavorableItem 12 |
c. Determine variable factory overheadControllable Variance, the fixed factory overheadvolume variance, and total factory overhead cost variance. Use the minus sign to enter favorable variances as negative numbers.
| Variable factory overhead controllable variance: | $ | SelectFavorableUnfavorableItem 14 |
| Fixed factory overhead volume variance: | $ | SelectFavorableUnfavorableItem 16 |
| Total factory overhead cost variance: | $ | SelectFavorableUnfavorableItem 18 |
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
