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 2,232 kilograms of plastic. The plastic cost the company $14,731.
According to the standard cost card, each helmet should require 0.67 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 3,100 helmets?
2. What is the standard materials cost allowed (SQ × SP) to make 3,100 helmets?
3. What is the materials spending variance?
4. What is the materials price variance and the materials quantity variance?
Standard Quantity allowed = 3100*0.67 = 2077 |
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Standard materials cost allowed = 2077*7 = 14,539 |
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Materials spending variance = 14,539 - 14,731 = 192 U |
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Materials Price Variance = (SP-AP) * AQ = (7 - 14731/2232) * 2232 = 893 F Materials Quantity Variance = (SQ-AQ) * SP = (2077-2232)*7 = 1085 U |
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet f...
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