€1512CHABLONG35XOXO9ADirect materials variancesDATAResources' requirements, standard pounds per un7 Resources' standard price, per pound✓ x ✓ fxXHBThe following data is provided for Bellingham Company:Units producedResources used for production, poundsResources' actual price, per pound1815a. Direct materials price variance16 b. Direct materials quantity variancec. Direct materials cost varianceC2.3$3.5016,40036,500$3.65DUsing formulas and cell references, perform the required analysis, and input your answers into the green cells inthe Amount column. Select the corresponding type of variance in the dropdowns in cells D15:D17. Transfer thenumeric results for the green entry cells (C15:C17) into the appropriate fields in CNOWV2 for grading.AmountEFormulasF KDirect materials variancesBellingham Company produces a product that requires 2.3 standard pounds per unit. The standard price is $3.50 per pound. 16,400 units used 36,500pounds, which were purchased at $3.65 per pound.This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in thequestions below.XOpen spreadsheetWhat is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorablevariance as a negative number using a minus sign and an unfavorable variance as a positive number.5,475 VUnfavorableFavorableUnfavorable ✓a. Direct materials price varianceb. Direct materials quantity variancec. Direct materials cost variance$-4,425 XCheck My WorkJhryUnfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit).Cost variance is the difference between the actual and standard total cost.

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Description: €1512CHABLONG35XOXO9ADirect materials variancesDATAResources' requirements, standard pounds per un7 Resources' standard price, per pound✓ x ✓ fxXHBThe following data is provided for Bellingham Company:Units producedResources used for production, pou

Material variance is the difference between the actual cost of direct materials and the expected…

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a. Direct materials price variance b. Direct materials quantity variance c. Direct materials cost variance Amount Formulas

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

€15
1
2
CHABLONG
3
5
XOXO
9
A
Direct materials variances
DATA
Resources' requirements, standard pounds per un
7 Resources' standard price, per pound
✓ x ✓ fx
X
H
B
The following data is provided for Bellingham Company:
Units produced
Resources used for production, pounds
Resources' actual price, per pound
18
15
a. Direct materials price variance
16 b. Direct materials quantity variance
c. Direct materials cost variance
C
2.3
$3.50
16,400
36,500
$3.65
D
Using formulas and cell references, perform the required analysis, and input your answers into the green cells in
the Amount column. Select the corresponding type of variance in the dropdowns in cells D15:D17. Transfer the
numeric results for the green entry cells (C15:C17) into the appropriate fields in CNOWV2 for grading.
Amount
E
Formulas
F

K
Direct materials variances
Bellingham Company produces a product that requires 2.3 standard pounds per unit. The standard price is $3.50 per pound. 16,400 units used 36,500
pounds, which were purchased at $3.65 per pound.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the
questions below.
X
Open spreadsheet
What is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable
variance as a negative number using a minus sign and an unfavorable variance as a positive number.
5,475 V
Unfavorable
Favorable
Unfavorable ✓
a. Direct materials price variance
b. Direct materials quantity variance
c. Direct materials cost variance
$
-4,425 X
Check My Work
Jhry
Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit).
Cost variance is the difference between the actual and standard total cost.

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