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 3,500 helmets, using 2,380 kilograms of plastic. The plastic cost the company 15,708 According to the standard cost card, each helmet should require 0.60 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 3,500 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 Total standard cost Actual cost incurred Total standard cost Total material variance-unfavorable 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 Number of helmets 3500 Standard kilograms of plastic per helmet 0.6 Total standard kilogras allowed 2100 Standard cost per kilogram 7 Total standard cost 14700 Actual cost incurred 15708 Total standard cost 14700 Total material variance-unfavorable 1008 2 Materials price variance 952 F =15708-(2380*7) Materials quantity variance 1960 U =7*(2380-2100)

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