Flexible Budgets, Standard Costs, and Variance Analysis For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passen 25 per passenger. The company's planning budget for July is based on 24 cruises and 1.400 passengers. Required: TA TV company $171,000. Prepare the company's planning budget for July. EXERCISE 8-4 Direct Materials Variances (L08-4] 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 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of Star $8 per kilogram. Required: 1. According to the standards, what cost for plastic 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 difference computed in (1) above into a materials price variance and a materials quantity variance. EXERCISE 8-5 Direct Labor Variances [LO8-5] 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 4,000 of these meals using 960 direct labor-hours. The company paid these direct lumbare a total of $9.600 for this work, or $10.00 per hour. A direct labor-hours at a cost of ACCT 230 - Chapter 8 - Part 2 Homework Exercise 8-4 Materials Price Variance = (SP-AP) X AQ Purchased (SD$8.00 - AD $7.60) X AQ Purchased 22,500 $0.40 X22,500 $19.000 ravarable Materials Quantity Variance = (SQ - AQ Used) X SP (SQ Direct Materials Spending Variance =