Obj. 3, 4 Mackinaw Inc. processes a base chemical into plastic. Standard costs a
ID: 2581507 • Letter: O
Question
Obj. 3, 4 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: EXCEL TEMPLATE Standard Costs Actual Costs 120,000 lbs. at $3.20 per lb. 118,500 lbs. at $3.25 per lb. 11,700 hrs. at $25.00 per hr. 2,000 hrs. at $24.40 per hr Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.: Direct labor Factory overhead Variable cost, $8.00 Fixed cost, $10.00 $91,200 variable cost $150,000 fixed cost Each unit requires 0.3 hour of direct labor. Instructions Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (B) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.Explanation / Answer
Mackinaw Inc A Material Price Variance Actual Price 3.25 Standard Price 3.2 Variance 0.05 Actual quantity 118500 Direct Material Price Variance 5925 Unfavourable Quantity Variance Actual Quantity 118500 Standard Quantity 120000 Variane 1500 Standard Price 3.2 Direct Material Quantity Variance 4800 Favourable Total Direct Material Cost Variance 1125 Unfavourable B Labor Rate Variance Actual Rate per hour 25 Standard rate per hour 24.4 Variance 0.6 Actual hours 11700 Direct Labor rate variance 7020 Unfavourable Time Variance Actual Direct labor hours 11700 Standard Direct Labor hours 12000 Variance 300 Standard rate per hour 24.4 Direct Labor Time Variance 7320 Favourale Total Direct Labour Cost variance 300 Favourale C Factory Overhead Variable Factory Overhead controllable Variance Actual variable FO cost incurred 91200 Budgeted Variable FO cost for 12000 hours 96000 Variance 4800 Favourale Fixed Factory Overhead volume variance Hours at normal capacity 15000 Standard Hours for amount produced 12000 Productive capacity not used 3000 Standard Fixed FO cost rate 10 Variance 30000 Unfavourable Total Factory Overhead cost Variance 25200 Unfavourable We appreciate rating of our answers Thank You
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