Question

4. value: 1.50 points 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 2,257 kilograms of plastic. The plastic cost the company $14,896. According to the standard cost card, each helmet should require 0.54 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. According to the standards, what cost for plastic should have been incurred to make 3,700 helmets? How much greater or less is this than the cost that was incurred? (Round Standard kilograms of plastic per helmet to 2 decimal places.) Number of helmets Standard kilograms of plastic per helmet Total standard kilograms allowed Standard cost per kilogram Total standard cost Actual cost incurred Total standard cost Total material variance unfavorable 3,700 0.54 1,998 $ 7.00 $ 13,986 $ 14,896: 13,986 $ 910 2. Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Round your actual materials price to two decimal places, and round your final answers to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity variance $ $ 1,813 F 1,710U BE

Answer 1

1) Calculate following

Number of helmet	3700
Standard kilogram of plastic per helmet	0.54
Standard kg allowed	1998
Standard cost per kilogram	7
Total Standard cost	13986
Actual cost incurred	14896
Total Standard cost	13986
Total material variance-Unfavorable	910 U

2) Material price variance = (7*2257-14896) = 903 F

Material quantity variance = (1998-2257)*7= 1813 U