Question

uds & 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	3.1	oz.		$	0.70	per oz.		$	2.17
Water	29	gal.		$	0.07	per gal.			2.03
Direct labor	1.75	hr.		$	12.00	per hr.			21.00

During the month of July, Collin’s employees gave 490 baths. The actual results were 795 ounces of shampoo used (cost of $643.95), 7,900 gallons of water used (cost of $632), and labor costs for 430 hours (cost of $5,719).

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.)
Direct Labor Rate Variance

Direct Labor Effeciency Variance

Answer 1

For Shampoo:

Direct material rate variance = (.81-.70)*795 = $87.45 A

Direct material quantity variance = (795-1519)*.7 = $ 506.80F

Direct materials variance = 419.35F

For water:

Direct material rate variance = (.08-0.07)*7900 = $79A

Direct material quantity variance = (7900-14210)*.07 = $ 441.7F

Direct materials variance = 362.7F

2. Direct labor rate variance = (13.3-12)*430 = $559A

Direct labor efficiency variance = (857.50-430)*12 =$5130F

Direct labor variance = $4571 F