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

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 3,400 helmets, using 2,652 kilograms of plastic. The plastic cost the company $17,503.

According to the standard cost card, each helmet should require 0.68 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 3,400 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Explanation / Answer

1 Standard quantity of kilograms = 3400*0.68= 2312 2 Standard materials cost=2312*7= $16184 3 Materials spending variance=17503-16184= $1319 U 4 Materials price variance=17503-(2652*7)= $1061 F Materials quantity variance=7*(2652-2312)= $2380 U

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