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 3,300 helmets using 2,376 kilograms of plastic. The plastic cost the company $18,058 According to the standard cost card, each helmet should require 0.66 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 3,300 helmets? 2. What is the standard materials cost allowed (SQ x SP) to make 3,300 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) 1.Standard quantity of kilograms allowed 2,178 Standard cost allowed for actual output17,424 Materials spending variance Materials price variance Materials quantity variance 4. 634

Explanation / Answer

Standard Price per KG              8.00 Actual cost of Plastic 18058 Actual Quantity of KG 2376 Actual Quantity per KP              7.60 Standard Quantity of KG allowed 2178 Standard Cost Allowed for Actual Output                                                                               17,424.00 Material Price Variance (Standard Price - Actual Price)*Actual Quantity Material Price Variance (8-7.6)*2376 Material Price Variance 950.40F Material Quantity Variance (Standard Quantity - Actual Quantity)*Standard Price Material Quantity Variance (2178-2376)*8 Material Quantity Variance (1584)U Material Spending Variance Material Quantity Variance+Material Price Variance Material Spending Variance 950.4-1584 Material Spending Variance (633.6)U

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