Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the
ID: 2526675 • 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 3,100 helmets, using 1,860 kilograms of plastic. The plastic cost the company $14,136.
According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram.
Required:
1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,100 helmets?
2. What is the standard materials cost allowed (SQ × SP) to make 3,100 helmets?
3. What is the materials spending variance?
4. What is the materials price variance and the materials quantity variance?
Standard quantity of kilograms allowed2.Standard cost allowed for actual output
3.Materials spending variance
4.Materials price variance
Materials quantity variance
Explanation / Answer
Answer:
1
Total standard kilograms allowed
1612
2
Total standard cost
12896
3
material spending variance
1240 U
4
material Price variance
744 F
material Quantiry variance
1984 U
Working notes for the above answer is as under
1
Number of helmets..
3100
Standard kilograms of plastic per helmet.
x 0.52
Total standard kilograms allowed
1612
Standard cost per kilogram.
x 8
Total standard cost
12896
Actual cost incurred (given)
14136
Total standard cost (above)
12896
material spending variance—unfavorable
1240
2
2
material Price variance
= (AQ × AP)- (AQ × SP)
=14136- (1860*8)
=14136-14880
=744F
3
(AQ × SP)- (SQ*SP)
=(1860*8)-12896
=14880-12896
=1984 U
1
Total standard kilograms allowed
1612
2
Total standard cost
12896
3
material spending variance
1240 U
4
material Price variance
744 F
material Quantiry variance
1984 U
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