Bellingham Company produces a product that requires 15 standard pounds per unit.
ID: 2405745 • Letter: B
Question
Bellingham Company produces a product that requires 15 standard pounds per unit. The standard price is $10 per pound. If 2,000 units required 30,900 pounds, which were purchased at $10.5 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 $ b. Direct materials quantity variance $ c. Direct materials cost variance $Explanation / Answer
a) Direct materials price variance (Actual price- standard price)*Actual qty purchased (10.5- 10)*30900 15450 U b) Direct materials quantity variance (AQ used - Standard qty allowed)*Standard price (30,900 - 2000*15)*10 9000 U c) Direct material cost variance 15450U+9000U 24450 U
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