Question

Bellingham Company produces a product that requires 2.3 standard pounds per unit. The standard price is $3.45 per pound. 15,700 units used 35,400 pounds, which were purchased at $3.65 per pound. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet What is the direct materials
(a) price variance,
(b) quantity variance, and
(c) cost variance?

Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

a. Direct materials price variance $
b. Direct materials quantity variance $
c. Direct materials cost variance $

Answer 1

Answer:

A) Price       7,080     U

B) Quantity 4,630.5  U

C) Total        11.710,5‬ U

Explanation:

DIRECT MATERIALS VARIANCES

$(standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance$

std cost  $3.45

actual cost  $3.65

quantity 35,400

difference  $(0.20)

$(0.2) \times 35,400 = DM \: price \: variance$

price variance  $(7,080.00)

$(standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance$

std quantity 36110.00

actual quantity 35400.00

std cost  $3.45

difference 710.00

$(710) \times 3.45 = DM \: quantity \: variance$

quantity variance  $2,449.50

Total Variance: 2,449.5 - 7,080 = -4.630,5‬