Direct Materials Variances

Bellingham Company produces a product that requires $16$ standard pounds per unit. The standard price is $$8\mathrm{.}5$ per pound. If $6,000$ units used $94,100$ pounds, which were purchased at $$8\mathrm{.}93$ per pound, what is the direct materials $($a$)$ price variance, $($b$)$ quantity variance, and $($c$)$ cost variance? 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

$

Unfavorable $$

b$.$ Direct materials quantity variance

$

$$

Unfavorable

Favorable

c$.$ Direct materials cost variance

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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.