Q1.
Q2.
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 3,700 helmets using 2,479 kilograms of plastic. The plastic cost the company $16,361 According to the standard cost card, each helmet should require 0.60 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 3,700 helmets? 2 What is the standard materials cost allowed (SQ x SP) to make 3,700 helmets? 3. What is the materia ls spending variance? 4. What is the mate ria ls price variance and the materials quantity variance? (For requlrements 3 and 4, indicate the effecet of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive vealues. Do not round intermediate calculations.) Standard quantity of kilograms allowed 1 Standard cost allowed for actual output 2. Materials spending variance 3. 4. Materials price variance Materials quantity variance Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.20g $4,600 $1.70q $0.70g s0.20g $2.40q Indirect labor Utilities $5,100 $1,700 $18,200 Supplies Equipment depreciation Property taxes. $2,700 $0.80q Factory administration $13,500 The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 67,980 $ 11,090 Direct labor Indirect labor Utilities 8,500 2,770 28,040 Supplies Equipment depreciation Property taxes S 2,700 16,170 Factory administration Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Budgeted labor-hours Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration 0 Total expense Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Actusl labor-hours Direct labor Indirect labor Utilities Supplies Equipment deprecistion Factory rent Property taxes Factory administration Total expense Required 1 Required 2 Required 3 Calculate the spending variances for all expense items. (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.) Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Flexible Spending Variances Results Budget Labor-hours 4,100 Direct labor 67,980 Indirect labor 11,090 Utilities 8,500 Supplies 2,770 Equipment deprecistion 28,040 8,500 Factory rent Property taxes 2,700 Factory administration 16,170 145,750 Total expense
