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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 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000.According to the standard cost card, each helmet should require 0.6 kilgrams of plastic at a cost of $8 per kilogram.REQUIRED:1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets?2. What is the standard materials cost allowed (SQ X SP) to make 35,000 helmets?3. Wht is the materials spending variance?4. What is the materials price variance and the materials quantity variance?

Respuesta :

TomShelby

Answer:

1.- 35,000 helment x 0.6 kilograms = 21,000 STD quantity

2.- 21,000 kilograms x $8 per kilogram = $168,000

3.- 9,000 F

4.- 12,000 U

Explanation:

[tex](standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance[/tex]

std cost  $8.00

actual cost  $7.60

quantity 22,500

[tex](8.00 - 7.60) \times 22,500 = DM \: price \: variance[/tex]

difference  $0.40

The actual cost for each kilogram is lower than expected. This means the copamny saved cash in the purchase. This variance is favorable.

saved 0.40 per kilograms x 22,500 purchased

price variance  $9,000.00

[tex](standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity\: variance[/tex]

std quantity 21000.00

actual quantity 22500.00

std cost  $8.00

[tex](21,000 - 22,500) \times 8 = DM \: quantity\: variance[/tex]

difference -1500.00

The actual quantity was higher than expected, this variance will be unfavorable

1,500 extra kilograms x $8 each =

quantity variance  $(12,000.00)

anthougo

1) The standard quantity of kilograms of plastic (SQ) allowed by Bandar Industries Berhad for making the 35,000 helmets is 21,000 (35,000 x 0.6) kilograms.

2) The standard materials cost allowed by Bandar Industries Berhad to make 35,000 helmets = $168,000 (21,000 x $8).

3) The materials spending variance is $9,000 favorable ($8 - $7.60) x 22,500.

4) The materials price variance is $9,000 favorable ($8 - $7.60) x 22,500.

5) The materials quantity variance is $11,400 unfavorable (22,500 - 21,000) x $7.60

What is a variance?

A variance is the difference between actual expenditure or revenue and expected expenditure or revenue.

Variance analysis is the measurement of the differences between actual and planned or budgeted expenditure and revenue.

Variance Analysis helps management determine:

  • The reasons that actual costs varied from budgeted costs.
  • Which department operated most efficiently.
  • The bottleneck of the production line.

Data and Calculations:

Production units for the quarter = 35,000 helmets

Direct materials used = 22,500 kilograms

Direct materials per unit = 0.643 kilograms (22,500/35,000)

Cost of direct materials = $171,000

Cost per unit = $7.60 ($171,000/22,500)

Standards Allowed:

Direct materials per helmet = 0.6 kilograms

Cost per kilogram = $8

Learn more about variance analysis at https://brainly.com/question/25790358

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