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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 3,100 helmets, using 2,232 kilograms of plastic. The plastic cost the company $14,731. According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. What is the standard quantity of kilograms 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 variance?

Respuesta :

anthougo

Answer:

Bandar Industries Berhad of Malaysia

1. The standard quantity of kilograms of plastic (SQ) that is allowed to make 3,100 helmets is:

= 2,015

2. The stand materials cost allowed (SQ * SP) is:

= $14,105

3. The materials spending variance is:

= $626 U

4. The materials price variance is:

= $893 F

The materials quantity variance is:

= $1,519 U

Explanation:

a) Data and Calculations:

Number of helmets manufacturing = 3,100

Units of direct materials used = 2,232 kilograms

Actual unit of direct materials used = 0.72 kilograms (2,232/3,100)

Cost of direct materials = $14,731

Unit cost of direct materials = $6.60 ($14,731/2,232)

Standard costs per kilogram = $7.00

Standard units of direct materials = 0.65 kilograms

1. The standard quantity of kilograms of plastic (SQ) that is allowed to make 3,100 helmets = 2,015 (3,100 * 0.65)

2. The stand materials cost allowed (SQ * SP) = $14,105 (2,015 * $7.00)

3. The materials spending variance = $626 U ($14,731 - $14,105)

4. The materials price variance = standard price - actual price * actual quantity used

= $7.00 - $6.60 * 2,232

= $893 F

The materials quantity variance = standard quantity - actual quantity *  standard price

= 2,015 - 2,232 * $7

= $1,519 U