Question

Chapters Direct Materials Direct Labor and Factory Overhead Cost Variance Analysis Machine in Standard costs and actual costs for direct materials, direct labor and factory overhead incurred for the manufacture of 70,000 units processes a base chemical plast Standard Coats Direct mat Actual Costs 221.500 . 55.10 17,900 hrs. $1820 Director Factory overhead 24.000 55.20 17.500 h. a 17.30 Rates per direct labore based on 100% of normal capacity of 18,260 direct Variable cost, 4.40 Fixed cost. 17.00 $76,230 variable con $127.820 foxed cost Each 25 hour of Grect later Required and variance, and total de materia l forbeariance as a m e mbering a n d table and .. Determine the direct materias price andere materials a potive number Direct Materais Price Variance Direct Materiais Quantity Variance Total Direct Materias Cost Variance raminadverbia

Answer 1

a.	Direct materials price variance	$     -22,180	Favorable
	AQ x (AR - SR) = 221800 x ($5.10 - $5.20) = $-22180
	Direct materials quantity variance	$     -11,440	Favorable
	SR x (AQ - SQ) = $5.20 x (221800 - 224000) = $-11440
	Total direct materials cost variance	$     -33,620	Favorable
b.	Direct labor rate variance	$         5,370	Unfavorable
	AH x (AR - SR) = 17900 x ($18.20 - $17.90) = $5370
	Direct labor time variance	$         7,160	Unfavorable
	SR x (AH - SH) = $17.90 x (17900 - 17500) = $7160
	Total direct labor cost variance	$      12,530	Unfavorable
c.	Variable factory overhead controllable variance	$           -770	Favorable
	Actual variable overhead - (Budgeted hours x SR)
	$76230 - (17500 x $4.40) = $76230 - $77000 = $-770
	Fixed factory overhead volume variance	$         5,320	Unfavorable
	Fixed overhead rate x (Normal hours - SH)
	$7.00 x (18260 - 17500) = $5320
	Total factory overhead cost variance	$         4,550	Unfavorable