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Question

ment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionLocator; assignment-take&inprogress; false eBook Direct Materials Variances Bellingham Company produces a product that requires 16 standard pounds per unit. The standard price is $11 per pound. If 5,700 units used 94,800 pounds which were purchased at $11.22 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 b. Direct materials quantity variance c. Direct materials cost variance 2 more Check My Work uses re 020 PM r

Explanation / Answer

Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U Material price variance = (AP-SP)*AQ AP = Actual price per unit = $11.22 SP = Standard price per unit = $11 AQ = Actual quantity consumed= 94800 F= Favourable U = Unfavourable Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U 11.2 11 -0.2 94800 -18960 U Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U Material quantity variance = (AQ-SQ)*SP AQ = Actual quantity consumed= 94800 SQ = Standard quantity = 91200 SP = Standard price per unit = $11 F= Favourable U = Unfavourable Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U 94800 91200 -3600 11 -39600 U Material cost variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U AP = Actual price per unit = $11.22 AQ = Actual quantity consumed= 94800 SQ = Standard quantity = 91200 SP = Standard price per unit = $11 F= Favourable U = Unfavourable Material cost variance = (SQ *SP )- (AQ*AP) Material cost variance = (91200*11 )- (94800*11.22) Material cost variance = 1003200 - 1061760 Material cost variance = -58560 U OR Price variance + Quantity variance Material cost variance = 18960 + 39600 Material cost variance = -58560 U

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