Follett Company makes handwoven blankets. The company\'s master budget appears i
ID: 2481829 • Letter: F
Question
Follett Company makes handwoven blankets. The company's master budget appears in the first column of the table. Required: Complete the table by preparing Follett's flexible budget for 4,400, 6,400, and 7,400 units. Cody's Collar Company makes custom leather pet collars. The company expects each collar to require 1.1 feet of leather and predicts leather will cost $3.05 per foot. Suppose Cody's made 73 collars during February. For these 73 collars, the company actually averaged 2.0 feet of leather per collar and paid 52.10 per foot. Requirement 1: Compute the standard direct materials cost per unit. Requirement 2: Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. Requirement 3: Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable. Requirement 6: Calculate the direct materials price and quantity variances.Explanation / Answer
Flexible Budget Variable Cost Per Unit Levels of Activity 4,400.00 6,400.00 7,400.00 Direct Materials(1080/5400) 0.20 880.00 1,280.00 1,480.00 Direct Labor(2700/5400) 0.50 2,200.00 3,200.00 3,700.00 Prime Cost 3,080.00 4,480.00 5,180.00 Overhead Variable overhead(1620/17100) 0.30 1,320.00 1,920.00 2,220.00 Total Fixed Costs 17,100.00 17,100.00 17,100.00 Total Costs(Prime Cost+VOH+FOH) 21,500.00 23,500.00 24,500.00