Exercise 10-1 Direct Materials Variances [LO10-1] 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 3,500 helmets, using 2.100 kilograms of plastic. The plastic cost the company $15,960. According to the standard cost card, each helmet should require 0.54 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 3,500 helmets? 2. What is the standard materials cost allowed (SQ * SP) to make 3,500 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 (ie., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) Answer is not complete. 1 1,800 2 S 3 Standard quantity of Colograms allowed Standard cost allowed for actual Output Materials spending variance Materials price variance Materials quantity variance 4 $ S 15,120 840 U 840 IF U o SkyChefs, Inc. prepares in-flight meals for a number of major airlines. One of the company's products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 7,300 of these meals using 1.450 direct labor-hours. The company paid its direct labor workers a total of $14,500 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a cost of $9.50 per hour Required: 1 What is the standard labor hours allowed (SH) to prepare 7,300 meals? 2 What is the standard labor cost allowed (SHSR) to prepare 7,300 meals? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effectie, zero variance). Input all amounts as positive values. Do no round intermediate calculations.) Answer is complete but not entirely correct. 1 2 3 4 Standard labor hours allowed Standard labor cost allowed Labor spending variance Laborate variance Labor eficiency vanance $ $ 1,460 13.870 630 725 4 275 U $ U OOO s F Logistics Solutions provides order fulfillment services for dot com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 185,000 items were shipped to customers using 8,000 direct labor hours. The company incurred a total of $27600 in variable overhead costs According to the company's standards, 0.04 direct labor hours are required to fulfill an order for one item and the variable overhead rate is $3.50 per direct labor hour Required: 1. What is the standard labor hours allowed (SH) to ship 185,000 items to customers? 2. What is the standard variable overhead cost allowed (SHSR) to ship 185,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead tate variance and the variable overhead officiency venance? (For requirements 3 and 4, indicate the effect of each variance by selecting "P" for favorable. "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.) Answer is complete but not entirely correct. 1 7400 2 $ 3 4 Standard quantity of labor hours allowed Standard variable overhead cost allowed Variable overhead spending variance Vanate Overhead race Variable overhead licencyarance $ 25.900 1.700U 400 3.450 $ $ OOO