Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Each

Question

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Each unit requires 0.4 hour of direct labor.

Required:

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.

c. Determine the variable factory overhead controllable variance, 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.

Explanation / Answer

b.

- Direct labor rate variance = (Standard rate - Actual rate) x Actual hours = (20 - 20.4) x 4,200 = $1,680 U

- Direct labor time variance = (Standard hours - Actual hours) x Standard rate = (4,300 - 4,200) x 20 = -$2,000 F

- Total direct cost variance = -2,000 + 1,680 = -$320 F

c.

- Variable factory overhead controllable variance = Actual expense - (budgeted rate per unit x standard units) = 16,800 - (4 x 4,300) = -$400 F

- Fixed factory overhead controllable variance = Actual expense - (budgeted rate per unit x standard units) = 13,500 - (3 x 4,300) = $600 U

- Total factory overhead controllable variance = 600 - 400 = $200 U

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.