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 3,200 helmets, using 1,920 kilograms of plastic. The plastic cost the company $16,512.

According to the standard cost card, each helmet should require 0.53 kilograms of plastic, at a cost of $9.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,200 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,200 helmets?

3. What is the materials spending variance?

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

Explanation / Answer

1 Standard quantity of kilograms = 3200*0.53= 1696 2 Standard materials cost allowed = 1696*9= $15264 3 Materials spending variance=16512-15264= $1248 U 4 Materials price variance=16512-(1920*9)= $768 F Materials quantity variance = 9*(1920-1696)= $2016 U

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