Question

() nelnet cyberbear N 3 tsb gap falsa moodle reddit citi M mediumy bb studentemal C cheg Cengage oval bib eBook Print hem Calculator 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 70,000 units of product were as follows: Standard Costs Actual Costs 189,000 lbs. at $4.60 Direct materials 187,100 lbs. at $4.40 h7,900 hrs. at $17.40 Direct labor 17,500 hrs. at $17.20 Rates per direct labor hr., Factory overhead based on 100% of normal capacity of 18,260 direct labor hrs.: Variable cost, $3.50 $60,640 variable cost $100,430 fixed cost Fixed cost, $5.50 Each unit requires 0.25 hour of direct labor. Required: 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, Favorable Direct Material Price Variance Favorable х Direct Materials Quantity Variance Favorable v X Total Direct Materials Cost Variance Previous Check My Work Save and Exit Submit Assianment for Grading Email Instructor All work saved. tv W X 27 MocBook Air

Answer 1

ANSWER:

(A)

Direct Material price variance = actual quantity x (standard price - actual price)

= 187100 x ($4.60 - $4.40)

= $37420 favorable

(B)

Direct Material quantity variance = standard price x (standard quantity - actual quantity)

= $4.60 x (189000 - 187100)

= $8740 favorable

(C)

Total direct material cost variance = (standard quantity x standard price) - (actual quantity x actual price)

= (189000 x $4.60) - (187100 x $4.40)

= $869400 - $823240

= $46160 favorable