Suds & Cuts is a local pet grooming shop owned by Collin Bark. Collin has prepar
ID: 2486274 • Letter: S
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:
During the month of July, Collin’s employees gave 410 baths. The actual results were 755 ounces of shampoo used (cost of $520.95), 7,100 gallons of water used (cost of $639), and labor costs for 350 hours (cost of $4,375).
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.)
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.)
During the month of July, Collin’s employees gave 410 baths. The actual results were 755 ounces of shampoo used (cost of $520.95), 7,100 gallons of water used (cost of $639), and labor costs for 350 hours (cost of $4,375).
StandardStandard Unit Cost Standard Shampoo Water Direct labor Quantity 2.3 oz. 21 gal. 1.35 hr. Rate 0.60 per oz 0.05 per gal. 1.38 1.05 14.85 $11.00 per hr.Explanation / Answer
SQ SR AQ AR Shampoo 943.00 oz. 0.60 per oz. 755.00 oz. 0.69 per oz. Water 8,610.00 gal. 0.05 per gal. 7,100.00 gal 0.09 per gal. Direct Labor 553.50 hr. 11.00 per hr. 350.00 hr. 12.50 per hr. Answer 1. Material Price Variance = (SR - AR) X AQ Shampoo (0.60 - 0.69) x 755 67.95 (U) Water (0.05 - 0.09) x 7100 284.00 (U) Total Material Price Variance 351.95 (U) Material quantity Variance = (SQ - AQ) X SR Shampoo (943 - 755) X $0.60 112.80 (F) Water (8610 - 7100) X $0.05 75.50 (F) Total Material Quantity Variance 188.30 (F) Answer 2. Labour Rate Variance = (SR - AR) X AH Labour Rate Variance = (11 - 12.50) X 350 hrs Labour Rate Variance = $525.00 (U) Labour Efficiency Variance = (SH - AH) X SR Labour Efficiency Variance = (553.50 - 350) X 11 Labour Efficiency Variance = $2238.50 (F)
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