Question

Chapter 10 Exercises (i Saved 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 3,700 helmets, using 2,405 kilograms of plastic. The plastic cost the company $15,873. 20 points According to the standard cost card, each helmet should require 0.57 kilograms of plastic, at a cost of $7.00 per kilogram. eBook Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,700 helmets? 2. What is the standard materials cost allowed (SQ * SP) to make 3,700 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? Hint (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.) Ask Print Standard quantity of kilograms allowed Standard cost allowed for actual output Materials spending variance Materials price variance Materials quantity variance References

Answer 1

1.)

Standard quantity of kilogram allowed = 3700 helmets * 0.57 kg plastic = 2109 kg

2.)

Standard cost allowed for actual output = Standard quantity * standards price

= 2109 kg * $7 per kg

= $14763

3.)

Material spending variance = Standard cost - Actual cost

= $14763 - $15873

= $1110 U

4.)

Material price variance = (Standard price - Actual price)*Actual quantity

Actual price = $15873 / 2405 kg = $6.6

Material price variance = ($7 - $6.6)*2405 Kg

= $962 F

Material quantity variance = (Standard quantity - Actual quantity)*Standard price

= (2109 kg - 2405 kg )*$7

= $2072 U