Ask Question
23 January, 15:44

Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 2.05 feet of leather and predicts leather will cost $3.60 per foot. Suppose Perfect Pet made 55 collars during February. For these 55 collars, the company actually averaged 2.20 feet of leather per collar and paid $3.20 per foot. Required: 1. Calculate the standard direct materials cost per unit. 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. 3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable. 6. Calculate the direct materials price and quantity variances.

+4
Answers (1)
  1. 23 January, 16:35
    0
    1. $3.20 x 2.20 = $7.04

    2. It will be favorable.

    3. It will be unfavorable.

    4. Direct material price variance = $22

    Direct material quantity variance = 0.48

    Explanation:

    1. Standard direct cost per unit=cost of direct materials price x direct material standard quantity per unit.

    2. It will be favorable because they expected or had budgeted to pay $3.60 per foot for the material but the actual cost became $3.20. So they pay $0.40 less than they had expected to pay.

    3. It will be unfavorable because they had planed or budgeted for each unit to use 2.05 feet of leather but they ended up needing 2.20 feet of leather per collar so that means they under budgeted by 0.15 feet.

    4. Direct material price variance = ($3.60 x 55) less ($3.20x55) = $22

    The total amount that was budgeted or expected to be paid is subtracted from the total actual price that was paid.

    Direct material quantity variance = (2.05x$3.20) less (2.20x$3.20) = - 0.48

    The total direct material quantity that is used is subtracted from the quantity that was expected to be used.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 2.05 feet of leather and predicts ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers