Suds & Cuts is a local pet grooming shop owned by Collin Bark. Collin has prepar
ID: 2579516 • 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: Standard Quantity Standard Rate Standard Unit Cost Shampoo 2 oz. $ 0.30 per oz. $ 0.60 Water 18 gal. $ 0.05 per gal. 0.90 Direct labor 1.2 hr. $ 11.00 per hr. 13.20 During the month of July, Collin’s employees gave 380 baths. The actual results were 740 ounces of shampoo used (cost of $259.00), 6,800 gallons of water used (cost of $544), and labor costs for 320 hours (cost of $3,840). 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.)
Explanation / Answer
Calculate material variance :
Suds :
Material price variance = (standard price-actual price)actual quantity
= (.30*740-259)
Material price variance = 37 U
Material usage variance = (standard quantity-actual quantity)standard price
= (380*2-740).30
Material usage variance = 6 F
Water :
Material price variance = (standard price-actual price)actual quantity
= (.05*6800-544)
Material price variance = 204 U
Material usage variance = (standard quantity-actual quantity)standard price
= (380*18-6800).05
Material usage variance = 2 F
2) Labour variance
Labour Rate variance = (standard rate-actual rate)actual hours
= (11*320-3840)
Labour rate variance = 320 U
Labour efficiency variance = (standard hours-actual hours)standard rate
= (380*1.2-320)11
Labour efficiency variance = 1496 F
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