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 3,700 helmets, using 2,442 kilograms of plastic. The plastic cost the company $16,117.

According to the standard cost card, each helmet should require 0.58 kilograms of plastic, at a cost of $7.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,700 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,700 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Answer 1

Data Standard Price 7 Per Kilo 0.58 Kilos 2146 Kilos 3700 Helmets 2442 Kilos 2442 Kilos 6.60 Per Kilo SP Standard quantity Per unit Standard Quantity for Actual Output SQ Actual Output Actual Quantity Purchased Actual Quanity Used Actual Price of Material (16117/2442) AQP AQ AP Answers Standrad Quanity of kilograms Allowed Standard Cost allowed for Actula output Material Spending Variance (15022-16117) Mateial Price Variance 2146 (0.58 3700) 15022 (2146*7) 1095 U (SP-AP) AQ purchased -(7-6.60)*2442 977 F Matrial Quanity Varaince (SQ-AQ)*SP(2146-2442)*7 2072 U