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 3,200 helmets, using 2,464 kilograms of plastic. The plastic cost the company $16,262. According to the standard cost card, each helmet should require 0.69 kilograms of plastic, at a cost of $700 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,200 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,200 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.) Standard quantity of kilograms allowed 2. Standard cost allowed for actual output Materials spending variance Materials price variance Materials quantity variance

Explanation / Answer

Answer:- Answer:- Answer:- 1)-The standard quantity of kilograms allowed to makes 3200 helmets is:-

Standard quantity of kilogram = Standard kilogram per unit*Actual units

                            =(.69 kilogram per unit*3200 units

                              = 2208 kilogram

2)-The standard material cost allowed to make 3200 helmets is:-

Standard material cost = Standard kilogram of plastic*Standard rate

                               =2208 kilogram*$7.00 per kilogram

                               = $15456

3)-Material spending variance =(Standard rate – Actual rate) * Actual units

                                       = ($7.00 per kilogram – $6.599838 per kilogram)*2464 kilogram   

                                       = $986 Favourable

4)- Material rate variance =(Standard rate – Actual rate) * Actual units

                                       = ($7.00 per kilogram – $6.569984 per kilogram)*2464 kilogram   

                                       = $986 Favourable

Material quantity variance=(Standard kilogram-Actual kilogram)*Standard rate per kilogram

                                       =(2208 kilogram – 2464 kilogram)*$7.00 per kilogram

                                          = $1792 Unfavourable

Where:-

Actual rate = Actual cost /Actual kilogram used

                  =$16262/2464 kilogram = $6.599838

Material cost variance = Material rate variance+ Material quantity variance

      806 Unfavourable =$986 Favourable+S1792 Unfavourable

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