Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the

ID: 2463953 • 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 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000.

According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram.

According to the standards, what cost for plastic should have been incurred to make 35,000 helmets? How much greater or less is this than the cost that was incurred? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round Standard kilograms of plastic per helmet to 1 decimal place.)

Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Explanation / Answer

According to the standards, the cost for plastic should have been incurred to make 35,000 helmets is $168,000.

This cost is $3,000 less than the actual cost that was incurred.

So, this is favourable.

Material Price variance and material usaga variance is computed as under:

30-Jun Actual Standard 35,000 Helmets Plastic 22,500 KG 0.64286 0.6 KG Plastic Cost 171,000 Cost per KG 7.6 7.6 8 Cost to make 35,000 Helmet is 171000 168000 Cost less than actual cost incurred is 3000 U

Navigate

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the

Question

Explanation / Answer

Related Questions

Navigate