   Chapter 23, Problem 23.1APE

Chapter
Section
Textbook Problem

Direct materials variances Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is $3.75 per pound. If 15,000 units required 36,000 pounds, which were purchased at 54.00 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance? (a) To determine Direct material variances: The difference between the actual material cost per unit and the standard material cost per unit for the direct material purchased is known as direct material cost variance. The direct material variance can be classified as follows: • Direct materials price variance. • Direct materials quantity variance. To determine: The direct materials price variance. Explanation The direct materials price variance is determined as follows: Direct materials price variance = [(Actual priceStandard price)× Actual quantity]=[($4

(b)

To determine
The direct materials quantity variance.

(c)

To determine
The total direct materials cost variance.

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