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 3,900 helmets, using 2,535 kilograms of plastic. The plastic cost the company $19,266 According to the standard cost card, each helmet should require 0.59 kilograms of plastic, at a cost of $8.00 per kilogram Required 1. According to the standards, what cost for plastic should have been incurred to make 3,900 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 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 quan tity variance

Explanation / Answer

Number of helmets 3900 Standard kilograms of plastic per helmet 0.59 Total standard kilograms allowed 2301 Standard cost per kilogram 8 Total standard cost 18408 Actual cost incurred 19266 Total standard cost 18408 Total material variance—unfavorable 858 Materials price variance = 19266-(2535*8)= 1014 Favorable Materials quantity variance = 8*(2535-2301)= 1872 Unfavorable

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