Sesiont ocator assignment-takedinprogress fahe No reailts Options Drect Material

Question

Sesiont ocator assignment-takedinprogress fahe No reailts Options Drect Materials, Diet Laber, and Fadtory Overhead Cost Variance Analysis Hackinaw Inc processes a base chemical Into plasic Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the man facture of 70,000 units 'of produt wer as follows t materials 210,000 s at $5.60 17,500 hrs, at$17.20. actory ovehead Rates prrect laber Standand Cost I Actual Cests 27000 s at $5.40 17,200 hrs. at $17.40 capacity of 0 dret labor b ble cost, $3.00 51,980 variable cost 85,822 fxed cost cost, $4.70 25 hour of direct labor ermine the direct materials price varlance, direct materials quantity varlance, and total direct materials cost variance, Enter a faverable variance as a negative namber using a minus sign and an unfavorable variance as a positive umber Price variance Quantity variance Total drect materials cost varlance 0@ 8

Explanation / Answer

a) Direct Material Cost Variance :-

= (Standerd Price * Standerd Quantity) - (Actual Price * Actual Quantity)

= ($5.60 * 210000) - ($5.40 * 207900)

= $1176000 - $1122660

= $53340 F

Direct Material Price Variance :-

= Actual Quantity * (Standerd Price - Actual Price)

= 207900 * ($5.60 - $5.40)

= 207900 * ($0.20)

= $41580 F

Direct Material Quantity Variance :-

= Standerd Price * (Standerd Quantity - Actual Quantity)

= $5.60 * (210000 - 207900)

= $5.60 * (2100)

= $11760 F

b). Direct Labor Cost Variance :-

= (Standerd Hours * Standerd Rate) - (Actual Hours * Actual Rate)

= (17500 * $17.20) - (17900 * $17.40)

= $301000 - $311460

= $10460 U

Direct Labor Rate Variance :-

= Actual Hours * (Standerd Rate - Actual Rate)

= 17900H * ($17.20 - $17.40)

= 17900H * (-$0.20)

= $3580 U

Direct Labor Time Variance:-

= Standerd Rate * (Standerd Hours - Actual Hours)

= $17.20 * (17500 - 17900)

= $17.20 * (-400)

= $6880 U

c) Variable Overhead Control Variance :-

= (Standerd Variable Rate * Standard Hours) - actual Variable Cost

= ($3.00 * 17500) - $51980

= $52500 - $51980

= $520 F

Fixed Overhead Volume Variance :-

= (Standard Fixed Rate * Standard Hour) - Actual Fixed Cost

= ($4.70 * 17900H) - $85822

= $84130 - $85822

= $1692 U

Total Factory Overhead Cost Variance :-

= Variable Overhead control Variance + Fixed Overhead Volume Variance

= $520 F + $1692 U

= $1172 U

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