Gulf Coast Resins Company processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 2,600 units of product were as follows:
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Standard Costs |
Actual Costs |
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Direct materials |
6,850 pounds at $6.40 |
7,000 pounds at $6.35 |
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Direct labor |
2,050 hours at $19.80 |
2,100 hours at $20.20 |
|
Factory overhead |
Rates per direct labor hour, |
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based on 100% of normal |
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|
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capacity of 1,950 direct |
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labor hours: |
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|
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Variable cost, $2.50 |
$4,970 variable cost |
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Fixed cost, $4.50 |
$8,775 fixed cost |
Each unit requires 0.6 hour of direct labor.
Instructions
Determine (a) the price variance, quantity variance, and total direct materials cost variance; (b) the rate variance, time variance, and total direct labor cost variance; and (c) variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance.