Exercise 10-1 Direct Materials Variances [LO10-1]

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the companys 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 2,016 kilograms of plastic. The plastic cost the company $15,322.

According to the standard cost card, each helmet should require 0.55 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 3,200 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?