A). Bellingham Company produces a product that requires 5 standard pounds per un
ID: 2523130 • Letter: A
Question
A). Bellingham Company produces a product that requires 5 standard pounds per unit. The standard price is $11.5 per pound. If 6,500 units required 33,200 pounds, which were purchased at $10.92 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
B). Bellingham Company produces a product that requires 6 standard hours per unit at a standard hourly rate of $14.00 per hour. If 5,500 units required 34,000 hours at an hourly rate of $13.30 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) total direct labor cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
C). Factory Overhead Controllable Variance
Bellingham Company produced 2,600 units of product that required 3 standard hours per unit. The standard variable overhead cost per unit is $5.30 per hour. The actual variable factory overhead was $43,030. Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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D). Bellingham Company produced 4,900 units of product that required 4 standard hours per unit. The standard fixed overhead cost per unit is $2.45 per hour at 18,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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Explanation / Answer
Answer for A)
a.Direct material price variance:
(STD. Price-actual price)×actual quantity
($11.5-$10.92)×33200 pounds
=-$19256
b.Direct material quantity variance:
(STD. Quantity -actual quantity)×std. Price
((6500units×5pounds)-33200 pounds)×$11.5
=$8050
c.Direct material cost variance:
Standard costs-actual cost
($11.5×6500 units×5pounds)-(33200 pounds×$10.92)
=-$11206
Answer for B)
a.Direct labour rate variance:
(STD. Rate-actual rate)×actual hours
($14-$13.3)×34000 hours
=-$23800
b.Direct labour time variance:
(STD. Time -Actual time)×std. Rate
((5500 units×6hours)-34000 hours)×$14
=$14000
C.direct labour cost variance:
Standard costs-actual costs
=5500 units×6 hours×$14-34000 hours×$13.3
=-9800
Answer for C)
Variable factory overhead controllable variance:
Actual overhead cost-budgeted overhead cost for standard hour
=$43030-(2600 units×3 hours×$5.3)
=-$1690
Answer for D)
Fixed overhead volume variance:
(Budgeted volume -actual volume)×std. Rate
=((18000hours/4hours)-4900 units)×$2.45
=-$980
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