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Bandar Industries Berhad of Malaysia manufactures sporting equipment

Accounting Oct 22, 2020

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 3.800 helmets, using 2,090 kilograms of plastic. The plastic cost the company $15,884. According to the standard cost card, each helmet should require 0.50 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,800 helmets? 2. What is the standard materials cost allowed (SQ SP) to make 3,800 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? (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.) 1. 2. 3. Standard quantity of kilograms allowed Standard cost allowed for actual output Materials spending variance Materials price variance Materials quantity variance

Expert Solution

1. Standard quantity of kilograms allowed (0.50 kg per helmet * 3800 helmets) 1,900 Kg
2. Standard cost allowed for actual output (1900 kg*$8.00 per kg) $15,200
3. Material spendig variance ($15,884 spent -15,200 standard as above) $684 U
4 Material price variance $836 F
  Material quantity variance $1,520 U

working;

material price variance = $15,884 spent - (2090 kg actual materials used*$8.00 per kg)

=>$836 F.

material quantity variance = (2090 kg actual material used *$8.00 per kg standard price) - (1900 kg standard quantity * $8.00 standard price per kg)

=> (2090*$8.00) -(1900*$8.00)

=>$1,520 U

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