Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the
ID: 2526579 • Letter: B
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 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000. According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets? 2. What is the standard materials cost allowed (SQ x SP) to make 35,000 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.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) 1. Standard quantity of kilograms allowed 2. Standard cost allowed for actual output 3. Materials spending variance 4. Materials price variance 21,000 $ 168,000 Materials quantity varianceExplanation / Answer
Answer:
1
Total standard kilograms allowed
21000
2
Total standard cost
168000
3
material spending variance
3000 U
4
material Price variance
9000 F
material Quantiry variance
12000 U
Working notes for the above answer:
1
Number of helmets..
35000
Standard kilograms of plastic per helmet.
x 0.6
Total standard kilograms allowed
21000
Standard cost per kilogram.
x 8
Total standard cost
168000
Actual cost incurred (given)
171000
Total standard cost (above)
168000
material spending variance—unfavorable
3000
2
material Price variance
= (AQ × AP)- (AQ × SP)
=171,000- (22500*8)
=171000-180,000
=9000F
3
(AQ × SP)- (SQ*SP)
=(22500*8)-168000
=180,000-16800
=12000 U
1
Total standard kilograms allowed
21000
2
Total standard cost
168000
3
material spending variance
3000 U
4
material Price variance
9000 F
material Quantiry variance
12000 U
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