Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the companys products, a football...
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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 70,000 helmets, using 45,000 kilograms of plastic in the process. The plastic cost the company RM342,000. (The currency in Malaysia is the ringgit, which is denoted here by RM.) According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of RM8 per kilogram.
Required: 1-a. How much material in kilograms should have been used?
1-b. What cost for plastic should have been incurred in the manufacture of the 70,000 helmets?
1-c. How much does this cost vary from what was incurred? (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
2. Break the difference computed in part (1-b) into a materials price variance and a materials quantity variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
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