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Direct Materials Variances Bellingham Company produces a product that requires 15 standard pounds per unit. The...

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Accounting

Direct Materials Variances Bellingham Company produces a productthat requires 15 standard pounds per unit. The standard price is $6per pound. If 4,400 units used 64,700 pounds, which were purchasedat $6.12 per pound, what is the direct materials (a) pricevariance, (b) quantity variance, and (c) cost variance? Enter afavorable variance as a negative number using a minus sign and anunfavorable variance as a positive number.

a. Direct materials price variance $ Unfavorable

b. Direct materials quantity variance $ Favorable

c. Direct materials cost variance $ Favorable

Answer & Explanation Solved by verified expert
4.4 Ratings (645 Votes)

  • All working forms part of the answer
  • [a] Direct material price variance = $ 7764 U

Material Price Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Quantity

(

$                               6.00

-

$                       6.12

)

x

64700

-7764

Variance

$              7,764.00

Unfavourable-U

  • [b] DM quantity variance = $ (7,800) F

Material Quantity Variance

(

Standard Quantity

-

Actual Quantity

)

x

Standard Rate

(

66000

-

64700

)

x

$                           6.00

7800

Variance

$              7,800.00

Favourable-F

  • [c] DM Cost Variance = $ (36) F

Material Spending Variance

(

Standard Cost

-

Actual Cost

)

(

$                  396,000.00

-

$          395,964.00

)

36

Variance

$                    36.00

Favourable-F

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