Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the
ID: 2541584 • 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 3,100 helmets, using 1,705 kilograms of plastic. The plastic cost the company $11,253.
According to the standard cost card, each helmet should require 0.50 kilograms of plastic, at a cost of $7.00 per kilogram.
Number of helmets3,100
Standard kilograms of plastic per helmet0.50
Total standard kilograms allowed1,550
Standard cost per kilogram$7.00
Total standard cost$10,850
Actual cost incurred$11,253
Total standard cost10,850
Total material variance—unfavorable $403
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).)
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 3,100 helmets, using 1,705 kilograms of plastic. The plastic cost the company $11,253.
Explanation / Answer
Number of helmets 3100 Standard kilograms of plastic per helmet 0.5 Total standard kilograms allowed 1550 Standard cost per kilogram 7 Total standard cost 10850 Actual cost incurred 11253 Total standard cost 10850 Total material variance—unfavorable 403 Materials price variance=11253-(1705*7)= $682 F Materials quantity variance=7*(1705-1550)= $1085U
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