GAP Inc. manufactures a special helmet that requires a special plastic. During the year ending...
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GAP Inc. manufactures a special helmet that requires a special plastic. During the year ending Jan. 31, the company manufactured 90,000 helmets, using 45,000 kilograms of plastics. The actual plastic cost the company $480,000. According to the standard cost card, each helmet should require 0.8 kilograms of plastic, at a cost of $8 per kilogram.
(1). According to the standard cost card, what cost for plastic should have been incurred to make 80,000 helmets? How much greater or less is this than the cost was actually incurred? (6 points)
(2). Breakdown the difference computed in (1) above into a materials price variance and a materials quantity variance. (6 points)
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