Question

5. velue 200 points E9-3 Interpreting Direct Materlals Price, Quantity Variances [LO 9-3) 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. Caloulate the standard direct materials cost per unit (Round your answer to 2 decimal places) Standard Direct Materials t per Collar 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable Direct Material Price Variance

Answer 1

Standard Guantiyof eather 2.oSest eguised for one Umit of coelaH Paice Per foot e leatthe $3.60 p foot Standasd Stan daid Disect madeial Cost Unit Sardaid aumtity X Standad Pri ce 1 dooS feet x3.60 7.38 C Q2 $ 3.60 pa oot Standaud Pu e.8 x Autual Pice 3.20 peu fot hlore, Diset Mataial Prie vaiane wil be favouable . Q.3 Staudasd Qvantity . OS eat Atual avantity 2.20 fest hor, uiect Madeial Quantty Vauiance wl be Unfavoutable

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Oiiect Mateiap Price Variance CS tandold Pari'e- Auual Pfa)x Actual auartity URed (3.60-3.8o) x 55x 2.20 0.40 X 191 17 448.4 favouable) pisect Mateial Quantity Vaiiane A dual avantity Standaid auantity. for Actual Ped uchen Standa = (55x 2.05) - (5SX2-20 x3.60 Ci12-15-12] 121 X3.60 t3-a5)-8.as x $3.60 29.70 Lunfaveulable)