Question

Accounting thx pls

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 6,400 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	8,300 lb. at $4.80		8,200 lb. at $4.70
Direct labor	1,600 hrs. at $18.70		1,640 hrs. at $19.00
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,670 direct
	labor hrs.:
		Variable cost, $3.00	$4,750 variable cost
		Fixed cost, $4.70	$7,849 fixed cost

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.

Direct materials price variance	$
Direct materials quantity variance
Total direct materials cost variance	$

b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct labor rate variance	$
Direct labor time variance	$
Total direct labor cost variance	$

c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variable factory overhead controllable variance	$
Fixed factory overhead volume variance
Total factory overhead cost variance	$

Answer 1

Direct Material Price Variance = (Actual Price - Standard Price) x Actual quantity purchased

Direct Material Price Variance = ($4.79- $4.80) x 8,200 = $820 F

Direct Material Quantity Variance = (Actual Quantity Used - Standard Quantity Allowed ) x Standard Price

Direct Material Quantity Variance = (8,200 – 8,300)) x $4.80 = $480 F

Total Direct Material Variance = $820 F + $480 F = $1,300 F

Direct Labour Rate Variance = (Actual rate- Standard rate) x Actual hours

Direct Labour Rate Variance = ($19.00 - $18.70) x 1,640 = $492 U

Direct Labour Efficiency Variance = (Actual hours - Standard Hours allowed ) x Standard rate

Direct Labour Efficiency Variance = (1,640 - 1,600) x $18.70 = $748 U

Total Labour Variance = $492 U + $748 U = $1,240 U

Variable Factory OH controllable variance = Actual OH – (Standard OH p.u x No. of units)

Variable Factory OH controllable variance = $4,750 – ($3 x 6,400 x 0.25 hrs) = $50 F

Fixed factory overhead volume variance = Applied Fixed OH – Standard Fixed OH

Fixed factory overhead volume variance = $4.70 x 6,400 - $4.70 x 1,670 / 0.25 = $1,316 U

Total factory overhead cost variance = $50 F + $1,316 U = $1,266 U