Question

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 2,368 kilograms of plastic. The plastic cost the company $15,629. According to the standard cost card, each helmet should require 0.56 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 3,700 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?

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

During the quarter ending June 30, the company manufactured 3,700 helmets, using 2,368 kilograms of plastic. The plastic cost the company $15,629. According to the standard cost card, each helmet should require 0.56 kilograms of plastic, for $7.00 per kilogram.

A) Standard quantity.

SQ= 0.56kg * 3,700 helmets= 2,072 kg el plastic.

B) Standard cost.

SC= 2,072 kg* $7= $14,504

C) Material spending variance.

MSvariance= real cost - estimated cost=  15,629 - 14,504= $1,125 unfavorable

D)

Material price variance= (standard price - actual price)*actual quantity= [7 - (15,629/2,368)]*2,368= $947 unfavorable

Material quantity variance= (standard quantity - actual quantity)*standard price= (2,072 - 2,368)*7= $2,072 unfavorable