Question

Bellingham Company produces a product that requires 14 standard pounds per unit. The standard price is $11.5 per pound. If 3,100 units used 44,300 pounds, which were purchased at $11.15 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	$	Favorable
b. Direct materials quantity variance	$	Unfavorable
c. Direct materials cost variance	$	Favorable

2.

Bellingham Company produces a product that requires 8 standard direct labor hours per unit at a standard hourly rate of $17.00 per hour. If 3,400 units used 26,100 hours at an hourly rate of $17.85 per hour, what is the direct labor (a) rate variance, (b) time 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 labor rate variance	$	Unfavorable
b. Direct labor time variance	$	Favorable
c. Direct labor cost variance	$	Unfavorable

Answer 1

1
a. Direct materials price variance	-15505	Favorable	=44300*(11.15-11.5)
b. Direct materials quantity variance	10350	Unfavorable	=11.5*(44300-3100*14)
c. Direct materials cost variance	-5155	Favorable	=(44300*11.15)-(3100*14*11.5)
2
a. Direct labor rate variance	22185	Unfavorable	=26100*(17.85-17)
b. Direct labor time variance	-18700	Favorable	=17*(26100-3400*8)
c. Direct labor cost variance	3485	Unfavorable	=(26100*17.85)-(3400*8*17)