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Problem 22-3A

Direct materials, direct labor, and factory overhead cost variance

analysis

 Obj. 34Mackinaw 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:


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Instructions

1.     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.



Problem 22-3A (Mackinaw) on P. 1146--Do Part A only on Direct Materials

Before preparing Part A, answer in complete sentences these 2 questions:

1. Looking at the direct materials equations for Standard Costs and Actual Costs, is the materials

price variance favorable or unfavorable? Why?

2. Looking at the direct materials equations for Standard Costs and Actual Costs, is the materials

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