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Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 2,475 kilograms of plastic. The plastic cost the company $18,810. According to the standard cost card, each helmet should require 0.68 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 3,300 helmets? 2. What is the standard materials cost allowed (SQ x SP) to make 3,300 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

Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 2,475 kilograms of plastic. The plastic cost the company $18,810. According to the standard cost card, each helmet should require 0.68 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 3,300 helmets? 2. What is the standard materials cost allowed (SQ x SP) to make 3,300 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

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...
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**Materials Cost Variance Analysis for Bandar Industries** Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 2,475 kilograms of plastic. The plastic cost the company $18,810. According to the standard cost card, each helmet should require 0.68 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 3,300 helmets?** 2. **What is the standard materials cost allowed (SQ × SP) to make 3,300 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.) | **Analysis** | |---------------------------------------------------| | 1. **Standard quantity of kilograms allowed** | 2,244 | | 2. **Standard cost allowed for actual output** | $17,952 | | 3. **Materials spending variance** | $990 F | | 4. **Materials price variance** | $990 F | | 5. **Materials quantity variance** | $1,848 U | This table shows the calculated quantities and variances related to the production of football helmets at Bandar Industries. The company evaluates its production efficiency and cost-effectiveness by computing these variances. - **Standard Quantity Allowed:** The expected amount of material for the produced output. - **Standard Cost Allowed:** The anticipated cost for the standard material usage. - **Materials Spending Variance:** The overall difference between actual and expected expenditures on materials, showing the actual spending was $990 favorable. - **Materials Price Variance:** Indicates if the materials were bought at a favorable or unfavorable price compared to the standard price. - **Materials Quantity Variance:** Reflects the efficiency in the use of materials, indicating an unfavorable variance of $1,848, suggesting materials were used inefficiently.
Transcribed Image Text:**Materials Cost Variance Analysis for Bandar Industries** Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 2,475 kilograms of plastic. The plastic cost the company $18,810. According to the standard cost card, each helmet should require 0.68 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 3,300 helmets?** 2. **What is the standard materials cost allowed (SQ × SP) to make 3,300 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.) | **Analysis** | |---------------------------------------------------| | 1. **Standard quantity of kilograms allowed** | 2,244 | | 2. **Standard cost allowed for actual output** | $17,952 | | 3. **Materials spending variance** | $990 F | | 4. **Materials price variance** | $990 F | | 5. **Materials quantity variance** | $1,848 U | This table shows the calculated quantities and variances related to the production of football helmets at Bandar Industries. The company evaluates its production efficiency and cost-effectiveness by computing these variances. - **Standard Quantity Allowed:** The expected amount of material for the produced output. - **Standard Cost Allowed:** The anticipated cost for the standard material usage. - **Materials Spending Variance:** The overall difference between actual and expected expenditures on materials, showing the actual spending was $990 favorable. - **Materials Price Variance:** Indicates if the materials were bought at a favorable or unfavorable price compared to the standard price. - **Materials Quantity Variance:** Reflects the efficiency in the use of materials, indicating an unfavorable variance of $1,848, suggesting materials were used inefficiently.
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