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 3,300 helmets, using 1,980 kilograms of plastic. The plastic cost the company $15,048 According to the standard cost card, each helmet should require 0.54 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 3,300 helmets? 2. What is the standard materials cost allowed (SQ SP) to make 3,300 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) Standard quantity of kilograms allowed 1 Standard cost allowed for actual output 2. Materials spending variance 3 Materials price variance 4. Materials quantity variance

Answer 1

Answer Standard quantity of kilograms allowed 1782 kgs Standard cost allowed for actual output $14256 $792 Material spending variance Material price variance $792 Material quantity variance $1584 U 1. What is the standard quantity of kilograms of plastic (sm) that is allowed to make 3300 helmets? - Standard quantity of = 0.54 kilograms of plastic kilograms of plastic required - for each helmet Actual helmets manufactured = 3300 helmets Standard quantity quantity of a 3300 helmets X0.54 kg kilograme of plastic required for 3300 helmets (so) = 1782 kilograms of plastic of plastic

2. What is the standard material cost allowed (SQxsp) to make 3300 helmets - Standard quantity allowed = 1782 kilograms Standard price (SP) = $8 per kilogram → Standard Material Cost allowed – SOX SP to make 3300 helmets = (1782 kgs x $ 8 perkg) = $14256

allowed 3. What is the material spending variance? Material spending variance = (sa xsp) - (AQ XAD) Standard quantity (sa) = 1782 kgs Standard price (sp) = $8 berkg Actual quantity (Am) = 1980 kgs Actual price (Ap) = $15048 = $7.60 per kg Material spending = ((1782 kgs x & 2) - ( 1980 kgs x $ 7.60) variance = $14256 - $15048 = $792 U used 1980

4. What is the material price variance and the quantity Variance? Material price variance = (sp-Ap) x AQ Standard price = $8 perkg "(SP) Actual price (Ap) = $7.60 perky Actual quantity of = 1980kgs plastic used → Material price variance = ($8-$7.60 x 1980 kgs = $792 F Material quantity = (SO-AQ) x SP variance = (1782-1980) kgs x 88 = $1584 U