Question
Hollister makes blended dress shirts. The company planned to produce and sell 35,000 shirts during 2019, but high demand led Fashionova to produce and sell
Hollister makes blended dress shirts. The company planned to produce and sell 35,000 shirts during 2019, but high demand led Fashionova to produce and sell 38,000. The only direct materials needed to manufacture the shirts are polyester and cotton. The standard quantities and prices of direct materials for each shirt are below:
Standard Quantities for 1 shirt Standard Prices
2.7 yards cotton fabric $1.80/yard cotton
.6 yards polyester fabric $2.40/yard polyester
During 2016, Fashionova purchases 24,000 yards of polyester fabric for $2.45 per yard and 106,000 yards of cotton fabric for $1.70 per yard. The company's accountant reported that 22,000 yards of polyester fabric was used in production during the year and that the Company's total quantity variance for direct materials (cotton and polyester) was $1,200 favorable.
What amount was included in the company's flex budget for direct materials?
What was the company's activity variance for direct materials during 2016?
How many yards of cotton fabric were used in production during 2016?
What was the company's total price variance for direct materials during 2016?
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