Bandar Industries Berhad of Malaysia manufactures sporting e

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 3,400 helmets, using 1,938 kilograms of plastic. The plastic cost the company $12,791. According to the standard cost card, each helmet should require 0.51 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. According to the standards, what cost for plastic should have been incurred to make 3,400 helmets? How much greater or less is this than the cost that was incurred? (Round Standard kilograms of plastic per helmet to 2 decimal places.) Number of helmets Standard kilograms of plastic per helmet Total standard kilograms allowed Standard cost per kilogram Total standard cost Actual cost incurred Total standard cost Total material variance-unfavourable

Solution

1) Schedule :

2) Material price variance = (7*1938-12791) = 775 Favorable

Material quantity variance = (3400*.51-1938)*7 = 1428 Unfavorable

Number of helmet	3400
Standard kilograms of plastic per helmet	0.51
Total standard kilograms allowed	1734
Standard cost per kilograms	7
Total Standard cost	12138
Actual cost incurred	12791
Total standard cost	12138
Total material variance-Unfavorable	653