Exercise 10-1 Direct Materials Variances [LO10-1] Bandar Industries Berhad of Ma

Question

Exercise 10-1 Direct Materials Variances [LO10-1] 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 3,800 helmets, using 2,622 kilograms of plastic. The plastic cost the company $17,305. 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. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,800 helmets? 2, what is the standard materials cost allowed (SQ × SP) to make 3,800 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 "FI" 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.) Standard quantity of kilograms allowed 2.Standard cost allowed for actual output 3. Materials spending variance Materials price variance Materials quantity variance

Explanation / Answer

Workings:

1. Standard quantity of kilograms allowed 2280 2.standard cost allowed for actual output $15,960 3. Material spending variance 1345.00 Unfavourable 4. Material price variance 1049.00 Favourable      Material quantity variance 2394.00 Unfavourable

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