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ICE Princess25 [194]
2 years ago
11

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. Calculate the standard direct materials cost per unit. 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. 3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable. 6. Calculate the direct materials price and quantity variances.
Business
1 answer:
Katarina [22]2 years ago
5 0

Answer:

1. $3.20 x 2.20 = $7.04

2. It will be favorable.

3. It will be unfavorable.

4. Direct material price variance = $22

   Direct material quantity variance = 0.48

Explanation:

1. Standard direct cost per unit=cost of direct materials price x direct material standard quantity per unit.

2. It will be favorable because they expected or had budgeted to pay $3.60 per foot for the material but the actual cost became $3.20. So they  pay $0.40 less than they had expected to pay.

3. It will be unfavorable because they had planed or budgeted for each unit to use 2.05 feet of leather but they ended up needing 2.20 feet of leather per collar so that means they under budgeted by 0.15 feet.

4. Direct material price variance =( $3.60 x 55) less ($3.20x55)=$22

The total amount that was budgeted or expected to be paid is subtracted from the total actual  price that was paid.

Direct material quantity variance = (2.05x$3.20) less (2.20x$3.20)= -0.48

The total direct material quantity that is used is subtracted from the quantity that was expected to be used.

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​_____ is a tort in which the presumption of negligence arises because the defendant was in exclusive control of the​ situation,
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Answer:

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A store has 5 years remaining on its lease in a mall. Rent is $1, 900 per month, 60 payments remain, and the next payment is due
photoshop1234 [79]

Answer:

a) No, since the present value of new lease is more than old.

b) Detailed information about the explanation is shown below

c) At 39.80%  nominal WACC

Explanation:

a

           PV of old and new lease terms

            Old              Cash Flow                New              Cash Flow

             0                  0                               0                    0                    

           1-9               - 1900                         1-9                   0                    

       10-60              - 1900                         10-60              2700

           NPER              60                          NPER                60

           rate                  1%                          rate                   1%

           PV             ($85,414.57)                PV                   ($98,250.36)

                            PV ( 1%, 60, 1900)                 PV ( 1%,9,- PV(1%,51, 2700))

Should the new lease be accepted? <u> No, since the present value of new lease is more than old.</u>

b)   If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?

For this part pv of old lease should be equal to pv of new lease at t = 9

                85414.57 × (1.01)⁹                             93416.657

                Nper                                                  51

                Rate                                                   1%

                New lease amount                           ( $2,347.26)

                                                                           PMT (1%, 51,93416.66)

c)

        Period      Old Lease       New Lease      Change in lease

          0                  0                    0                     0  

         1-9            -1900                 0                    -1900  

        10-60        -1900                  -2700             800

        -1900    

        -1900    

        -1900    

        -1900    

        -1900    

        -1900    

        -1900    

        -1900    

        -1900    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800  

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800    

        800

        3.317%                  x 12   =   39.80%

IRR(Values 1:60)

The store owner is not sure of the 12% WACC - it could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?

At 39.80%  nominal WACC

4 0
2 years ago
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