Question

19 Chapter10 Homeworid 10-12.30 0 Help Se&E ubm Exercise 10-1 Direct Materials Variances (LO10-1 1 Bandar Industries Behad of Malaysa manfachures sporting equpment One of the company's products a football helmet for the North Anencan market, reques aspecial pasic During the quaner ending June 30, the company mandactred 1000 helmets using 2301 kograms of plastic The plastic cost the company S15,187 Accoang to the standard cost card, each heinset should requre 053 klogram of piac at a cost of $700 per klogram Required tWhat s the standerd quantity of kdograms of plastic c that is alowed to make 3,900 hemets 2 What in the standand maeras cot aowed Sh to make 3.900 heimets 2 hat is the matenals spending vanance 4 What is the materals pnice variance and the maeras qaanty varance shon (For requirements 3 and 4, indicene the effect of eech vaiance by selecing " for favarable for unfewrable, nd "None for no effect ere verience Input all amounts as positive values Do net ound intermediee caculeions Tdd aot acu M spendng c Ma pc vaiace Ma antly va

Answer 1

1)standard quantity of kilograms of plastic that is allowed =Actual output * standard Quantity allowed per helmet for actual output produced

                         = 3900 * .53

                          = 2067 KG

2)Standard material cost allowed = standard quantity of kilograms of plastic that is allowed * Standard cost per KG

                                  = 2067 * 7

                                   = $ 14469

3)Actual material cost = Actual quantity *Actual cost per KG

                         = 2301*15.18

                          = $ 34929.18

Material spending variance =Actual material cost - standard material cost allowed

                          = 34929.18 - 14469

                          = $ 20460.18 U

4)Material price variance =Actual quantity[Actual rate per KG -Standard rate per KG]

                               = 2301 [15.18 - 7]

                                = 2301 * 8.18

                                = 18822.18 U

Material quantity variance = Standard rate per KG [Actual quantity - standard quantity allowed]

                           = 7 [2301-2067

                           = 7* 234

                            = 1638 U