Question

Suds & Cuts is a local pet grooming shop owned by Collin Bark. Collin has prepared the following standard cost card for each dog bath given: Standard Quantity Standard Rate Standard Unit Cost Shampoo 1.7 oz. $ 0.70 per oz. $ 1.19 Water 15 gal. $ 0.05 per gal. 0.75 Direct labor 1.05 hr. $ 10.00 per hr. 10.50 During the month of July, Collin’s employees gave 350 baths. The actual results were 725 ounces of shampoo used (cost of $558.25), 6,500 gallons of water used (cost of $455), and labor costs for 290 hours (cost of $3,306). Required: 1. Calculate Suds & Cuts direct materials variances for both shampoo and water for the month of July. (Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) 2. Calculate Suds & Cuts direct labor variances for the month of July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable. Round your answers to nearest dollar amount.)

Answer 1

ans	in $
Direct material price variance
Shampoo
(AQ*AR)-(AQ*SR)
558.25-(725*.7)	51	U
Water	130	U
455-(6500*.05)
Direct material Quantity variance
Shampoo
SR*(AQ-SQ used)
.7*(725-(350*1.7))	91	U
water	63	U
.05*(6500-(350*15))
ans
Direct Labor rate variance	406	U
(AH*AR)-(AH*SR)
3306-(290*10)
Direct labor efficiency variance	775	F
SR*(AH-SH used)	-775
10*(290-(350*1.05))