Question

Bellingham Company produces a product that requires 6 standard pounds per unit. The standard price is $3 per pound. If 4,800 units required 29,700 pounds, which were purchased at $2.88 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance? 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 $fill in the blank 1 b. Direct materials quantity variance $fill in the blank 3 c. Total direct materials cost variance $fill in the blank 5

Answer 1

Answer:

Results are below.

Explanation:

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (3 - 2.88)*29,700

Direct material price variance= $3,564 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (6*4,800 - 29,700)*3

Direct material quantity variance= (28,800 - 29,700)*3

Direct material quantity variance= $2,700 unfavorable

Now, the total direct material variation:

total direct material variation= 3,564 - 2,700

total direct material variation= $864 favorable