Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the
ID: 2448800 • 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 3,500 helmets, using 2,590 kilograms of plastic. The plastic cost the company $19,684.
According to the standard cost card, each helmet should require 0.69 kilograms of plastic, at a cost of $8.00 per kilogram.
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
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 variance-unfavourable $0
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 3,500 helmets, using 2,590 kilograms of plastic. The plastic cost the company $19,684.
Explanation / Answer
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
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).)
1) Materials price variance = (Actual price - Standard Price) *Actual Quantity
Materials price variance = (19684/2590 - 8)*2590
Materials price variance = $ 1036 F
2). Materials usage/quantity variance = (Actual Quantity Used- Standard Quantity)Standard Price
Materials usage/quantity variance = (2590 - 3500*0.69)*8
Materials usage/quantity variance = $ 1400 U
Number of helmets 3500 Standard kilograms of plastic per helmet 0.69 Total standard kilograms allowed 2415 Standard cost per kilogram 8 Total standard cost 19320 Actual cost incurred 19684 Total standard cost 19320 Total material variance-unfavourable 364Related Questions
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