Question
Exercise 8-4 Direct Materials Variances Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company's products, a football helmet for the North American
Exercise 8-4 Direct Materials Variances
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. The plastic cost the company $171,000. According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram.
1. According to the standards, what cost for plactis should have been incurred to make 35,000 helmets? How much greater or less is this than the cost that was incurred?
2. Break down the different computed in (1) above into a materials price variance and a materials quantity variance.
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