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 2,482 kilograms of plastic. The plastic cost the company $16,381. According to the standard cost card, each helmet should require 0.65 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 varianceunfavorable 2. Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Round your actual materials price to two decimal places, and round your final answers to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity variance

Explanation / Answer

1) Schedule :

b) Material price variance = (7*2482-16381) = 993 F

Material usage variance = (2210-2482)*7 = 1904 U

No of helmet 3400 Standard Kilograms of plastic per helmet 0.65 Total standard kilograms allowed 2210 Standard cost per kilogram 7 Standard cost 15470 Actual cost incurred 16381 Total standard cost 15470 Total material variance-Unfavorable 911

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