Direct materials variances The following data is provided for Bellingham Company: DATA 2.5 Resources' requirements, standard pounds per un Resources' standard price, per pound $3.45 Units produced 15,200 Resources used for production, pounds 36,100 $3.65 Resources' actual price, per pound 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 Formulas a. Direct materials price variance b. Direct materials quantity variance
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.
Direct materials variances
Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is $3.45 per pound. 15,200 units used 36,100 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.
| Direct materials variances | |||||||||
| The following data is provided for Bellingham Company: | |||||||||
| DATA | |||||||||
| Resources' requirements, standard pounds per unit | 2.5 | ||||||||
| Resources' standard price, per pound | $3.45 | ||||||||
| Units produced | 15,200 | ||||||||
| Resources used for production, pounds | 36,100 | ||||||||
| Resources' actual price, per pound | $3.65 | ||||||||
| 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 | Formulas | ||||||||
| a. | Direct materials price variance | ||||||||
| b. | Direct materials quantity variance | ||||||||
| c. | Direct materials cost variance | ||||||||
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