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Pet Collar Company makes custom leather pet collars. The company expects each collar to require 1.55 feet of leather and predicts leather will cost $2.60
Pet Collar Company makes custom leather pet collars. The company expects each collar to require 1.55 feet of leather and predicts leather will cost $2.60 per foot. Suppose Perfect Pet made 50 collars during February. For these 50 collars, the company actually averaged 1.85 feet of leather per collar and paid $2.10 per foot.
Required:
- Calculate the standard direct materials cost per unit.
- Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable.
- Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable.
- Calculate the direct materials price and quantity variances.
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