Answer:
Instructions are listed below.
Explanation:
Giving the following information:
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:
Standard Costs - Actual Costs
Direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25
Direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.:
Variable cost, $8.00 $91,200 variable cost
Fixed cost, $10.00 $150,000 fixed cost
Each unit requires 0.3 hour of direct labor.
A) Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (3.20 - 3.25)*118,500= $5925 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (120,000 - 118,500)*3.20=-$4,800 favorable
Total direct material variance= 5,925 - 4,800= 1,125 unfavorable
B)Direct labor efficiency variance= (SQ - AQ)*standard rate
Direct labor efficiency variance= (12,000 - 11,700)*24.40= -$7,320 favorable
Direct labor price variance= (SR - AR)*AQ
Direct labor price variance= (24.40 - 25)*11,700= $7,020 unfavorable
Total direct labor variance= $300 favorable
C) Variable factory overhead controllable variance= (8*15,000 - 92,100)= -$27,900 favorable
Fixed factory overhead volume variance= (10*15,000 - 150,000)= 0
Total factory overhead variance= 27,900 favorable
