Question

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company's products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,100 helmets, using 1,891 kilograms of plastic. The plastic cost the company $14,372. According to the standard cost card, each helmet should require 0.51 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,100 helmets? 2. What is the standard materials cost allowed (SQ * SP) to make 3,100 helmets? 3. What is the materials spending varlance? 4. What is the materials price variance and the materials quantity variance? (For requirements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) 1. 2. 3. 1,581| 12.648 Standard quantity of kilograms allowed Standard cost allowed for actual output is Materials spending variance Materials price variance Materials quantity varianco

Answer 1

3	Material Spending variance =(Standard price per unit - Actual price per unit)*Actual quantity
	Material Spending variance =($4.08 - $4.64)*3,100 helmets =$1,736(U)
4	Material Price variance = (Standard price - Actual Price)*Actual quantity
	Material Price variance = ($8 - $7.60)*1,891 kg =$756.40(F)
5	Material quantity variance = Standard price(Standard Quantity - Actual Quantity)
	Material quantity variance = $8(1,581 kg - 1,891 kg) =$2,480(U)