Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 1.5 feet of leather and predicts leather will cost $2.50 per foot. Suppose Perfect Pet made 60 collars during February. For these 60 collars, the company actually averaged 1.75 feet of leather per collar and paid $2.00 per foot.

Who can show how we calculate the standard direct materials cost per unit?

What is the predicted cost?

What is the actual cost?

Is the direct materials price variance favorable or unfavorable? Explain why.

Is the direct materials quantity variance favorable or unfavorable? Explain why?