Question

Bandar Industries Berhad of Malaysla manufactures sporting equipment. One of the company's products, a football helmet for the North American market, requires a special plastlc. During the quarter ending June 30, the company manufactured 3,100 helmets, using 1,705 kllograms of plastic. The plastic cost the company $11,253. According to the standard cost card, each helmet should require 0.50 kllograms of plastic, at a cost of $7.00 per klogram. Required: 1. What Is the standard quantity of killograms of plastic (SQ) that is allowed to make 3,100 helmets? 2 What Is the standard materials cost allowed (SQ SP) to make 3,100 helmets? 3. What Is the materials spending variance? 4. What Is the materials price variance and the materials quantity varlance? (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 cealculations.) Standard quantity of kilograms allowed 1 Standard cost allowed for sctual output 2. Materials spending variance 3. 4. Materials price variance Materials quantity variance

Answer 1

Standard Quantity allowed = 3100*0.50 = 1550
Standard cost allowed = 1550*7 = 10,850
Materials spending variance = 10,850 - 11,253 = 403 U
Materials Price Variance = (SP-AP) *AQ = (7 - 11,253/1705)*1705 = 682 F Materials Quantity Variance = (SQ-AQ) *SP = (1550-1705)*7 = 1085 U