value: 1.00 points Bandar Industries Berhad of Malaysia manufactures sporting eq
ID: 2512356 • Letter: V
Question
value: 1.00 points 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, he company manufactured 3,800 helmets, using 3,040 kilograms of plastic. The plastic cost the company $20,064. According to the standard cost card, each helmet should require 0.70 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 3,800 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 Standard cost per kilogram Total standard cost Actual cost incurred Total standard cost Total material variance-unfavorable 3,800 0.70 2.660 ! S 7.00 S 18,620 S 20,064 18,620 S 1,444 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 MacBook AExplanation / Answer
Answer
calculated the material price and material quantity variance as below
material price variance = Actual material * ( actual rate - standard rate )
= 3040 * (20064 / 3040 - 7 )
= - 1216
material quantity variance = standard rate * ( actual material used - standard material allow for actual
production )
= 7 * ( 3040 - 0.70 * 3800 )
= 2660
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