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Safari File Edit View History Bookmarks Window Help ? ey | 80%.. 8 4)) Sat Jun 30 4:21 PM a ? Alex ezto.mheducation.com Home - alamo.edu Chapter 9 Exercises value 11.11 points Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 2.30 feet of leather and predicts leather will cost $4.10 per foot. Suppose Perfect Pet made 80 collars during February. For these 80 collars, the company actually averaged 2.40 feet of leather per collar and paid $3.65 per foot. Required 1. Calculate the standard direct materials cost per unit. (Round your answer to 2 decimal places.) Standard Direct Materials per Collar 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. irect Material Price Variance 3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable ct Material Quantity Variance afari.dmg 0

Explanation / Answer

1

standard cost per unit = materials per unit * cost per unit of material = 2.3 * 4.1 = 9.43 per unit

2

Price is favourable as per unit actual cost is less than standard cost

3

Unfavourable as number of foot used per unit is more than standard allowed

6

Price variance = standard materials for actual production * (standard rate per direct material - actual rate) = 2.3 * 80 * (4.1-3.65) = 82.8

Quantity variance = standard rate per unit * (standard materials for actual production - actual materials used) = 4.1 * ( 80 * 2.3 - 80 * 2.4) = -32.8

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