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. a. Direct materials price variance $ fill in the blank 2 b. Direct materials quantity variance $ fill in the blank 4 c. Direct materials cost variance $ fill in the blank 6
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 2.3 standard pounds per unit. The standard price is $3.35 per pound. 16,200 units used 36,400 pounds, which were purchased at $3.55 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.
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.
| a. Direct materials price variance | $ fill in the blank 2 |
|
| b. Direct materials quantity variance | $ fill in the blank 4 |
|
| c. Direct materials cost variance | $ fill in the blank 6 |
|
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