Suds & Cuts is a local pet grooming shop owned by Collin Bark. Collin has prepar

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 2 oz. $ 0.10 per oz. $ 0.20 Water 20 gal. $ 0.05 per gal. 1.00 Direct labor 0.75 hr. $ 9.00 per hr. 6.75 During the month of July, Collin’s employees gave 360 baths. The actual results were 725 ounces of shampoo used (cost of $116), 6,500 gallons of water used (cost of $455), and labor costs for 230 hours (cost of $2,300). 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.)

Explanation / Answer

Direct material cost variance= 571 - 432 = 139 U

Further bifurcation

DIrect material quantity variance

Shampoo = (720-725)0.1 = $0.5 U

Water = (7200-6500)0.05 = $35 F

Direct material rate variance

Shampoo = (0.1-0.16)725 = $43.5 U

Water = (0.05-0.07)6500 = $130 U

Direct labor cost variance = 2430 - 2300 = 130 F

Further analysis,

Direct labor qty variance = (270-230)9 = $360 F

Direct labor rate variance = (9-10)230 = $230 U

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.