1 answer

Direct Materials Variances Bellingham Company produces a product that requires six standard pounds per unit. The...

Question:

Direct Materials Variances Bellingham Company produces a product that requires six standard pounds per unit. The standard pri

Direct Materials Variances Bellingham Company produces a product that requires six standard pounds per unit. The standard price is $10 per pound. If 2,200 units used 12,800 pounds, which were purchased at $10.4 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) 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 Unfavorable b. Direct materials quantity variance Favorable c. Direct materials cost variance Unfavorable

Answers

Materials Price Variance = (SP-AP) *AQ

= (10 - 10.4)*12,800

= 5120 Unfavorable

Materials Quantity Variance = (SQ-AQ) *SP

= (2200*6 - 12800)*10

= - 4000 Favourable (minus sign)

Total materials cost variance

= 5120U + 4000F

= 1120 Unfavorable

.

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