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 3,042 kilograms of plastic. The plastic cost the company $23,119.According to the standard cost card, each helmet should require 0.69 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 3,900 helmets?2. What is the standard materials cost allowed (SQ × SP) to make 3,900 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.)

Answer 1

Answer:

Given Data  

No. of helmets = 3900

Standard Kg of plastic per helmet =   0.69 Kg

Part 1. Standard Quantity of Kilograms of Plastic

Standard Quantity = 3900 X 0.69 Kg  

Standard Quantity = 2691 Kg

Standard Cost per Kg = $8.00 per Kg

Part 2. Standard Materials Cost Allowed

Standard Cost = 2691 Kg X $8.00 per Kg   = $21528

Actual Quantity = 3042 Kg

Actual Cost = $23119

Actual Cost per Kg = 23119 / 3042    

Actual Cost per Kg = $7.60 per Kg

Part 3. Materials Spending Variance

Material Spending Variance = (Standard Quantity - Actual Quantity) X Standard Price

Material Spending Variance = (2691 -   3042) X 8

Material Spending Variance = 2808 U

 

Part 4. Materials Price Variance and the Materials Quantity Variance

Material Price Variance = (Standard Price – Actual Price) X Actual Quantity

Material Price Variance = 1216.80 F

Material Quantity Variance = (Standard Quantity - Actual Quantity) X Standard Price

Material Quantity Variance = (2691 -   3042) X 8

Material Quantity Variance = 2808 U