Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the

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 3,400 helmets, using 1,938 kilograms of plastic. The plastic cost the company $12,791. According to the standard cost card, each helmet should require 0.51 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 3,400 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-unfavourable

Explanation / Answer

1) Schedule :

2) Material price variance = (7*1938-12791) = 775 Favorable

Material quantity variance = (3400*.51-1938)*7 = 1428 Unfavorable

Number of helmet 3400 Standard kilograms of plastic per helmet 0.51 Total standard kilograms allowed 1734 Standard cost per kilograms 7 Total Standard cost 12138 Actual cost incurred 12791 Total standard cost 12138 Total material variance-Unfavorable 653

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