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 3,200 helmets, using 2,368 kilograms of plastic. the plastic cost the company $15,629. according to the standard cost card, each helmet should require 0.68 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 3,200 helmets? 2. what is the standard materials cost allowed (sq × sp) to make 3,200 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.  2176 kilograms of plastic  2. $15,232  3. $397 (U)     4. $947 (F)   $1,344  (U)

Explanation:

Generally, cost variance analysis can be used to estimate the difference between the actual cost and the expected costs. However, if the actual cost is more than the expected cost, then the variance is said to be unfavorable and vice versa.

1. The standard quantity of kilograms of plastic (SQ) that is allowed to make 3,200 helmets?

We know that each helmet requires 0.68 kilograms of plastic. Thus, to make 3200 helmets, we will need 0.68*3200 = 2176 kilograms of plastic

2. The standard materials cost allowed (SQ × SP) to make 3,200 helmets.

We also know that each helmet costs $7.00 per kilogram. Therefore, to make 3200 helmets, the standard materials cost = $7.00*2176 = $15,232

3. The material spending variance = difference between the actual cost and the standard cost = $15,629 - $15,232 = $397  U

4.  The materials price variance and the materials quantity variance?

The materials price variance  is the actual cost- (standard cost per kilogram x actual number of plastic used) . Therefore:

Materials price variance = $15,629 - ($7 x 2,368 kg)

Materials price variance = $15,629 - $16,576 = ($947) F

Since the budgeted cost is relatively higher than the actual cost, the materials price variance is favorable (F) by $947.

The materials quantity variance = (Actual number of plastic used x Standard cost per kilogram) - Standard cost

Materials quantity variance = ($7 x 2,368 kg) - $15,232

Materials quantity variance = $16,576 - $15,232 = $1,344  U

Since the budgeted cost is relatively higher than the standard cost, the materials quantity variance is unfavorable (U) by $1,344.