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 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company RM171,000. (The currency in Malaysia is the ringgit, which is denoted here by RM.) According to the standard cost card, the following helmet should require 0.6 kilograms of plastic, at a cost of RM8 per kilogram.
(a) What cost for plastic should have been incurred to make 35,000 helmets? How much greater or less is this than the cost that was incurred?

Plastics are a wide range of synthetic or semi-synthetic materials that use polymers as a main ingredient. Their plasticity makes it possible for plastics .

1. The standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets

=21,000 kg

calculation,

The standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets = Standard quantity required per helmet x Total no. of helmets

= 0.60 kg x 35,000

= 21,000 kg of plastic

2. The standard materials cost allowed (SQ X SP) to make 35,000 helmets = $168,000

Working Notes:

The standard materials cost allowed (SQ X SP) to make 35,000 helmets = Standard quantity required per helmet x Standard cost per kg x Total no. of helmets

= 0.60 x $8 x 35,000

= $168,000

Hence, the cost of plastic is $168,000

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