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 3,900 helmets, using 2,886 kilograms of plastic. The plastic cost the company $21,934.

According to the standard cost card, each helmet should require 0.67 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 3,900 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,900 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?

1. Standard quantity of kilograms allowed =

2. standard cost allowed for actual output =

3. materials spending variance = .... and favorable or unfavorable

4. materials price variance = ... and favorable or unfavorable

5. Materials quantity variance = ... and favorable or unfavorable

Explanation / Answer

1 Standard quantity of kilograms allowed=3900*0.67= 2613 2 Standard cost allowed for actual output = 2613*8= $20904 3 Materials spending variance = 21934-20904= $1030 U 4 Materials price variance=21934-(2886*8)= $1154 Materials quantity variance = 8*(2886-2613)= $2184 U

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