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 QuantityStandard RateUnit Cost Standard Shampoo Water Direct labor 1.7 oz. 15 gal. $ 0.05 per gal 0.70 per oz. S 1.19 0.75 10.50 1.05 hr. $10.00 per hr 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)

Explanation / Answer

1) standard quantity of shampoo per bath= 1.7 oz

so, for 350 baths, standard quantity of shampoo used= 1.7*350 oz

                                                                             = 595 oz

actual quantity of shampoo used= 725 oz

thus, variance= (actual quantity- standard quantity)^2 / no. of baths

                   = (725-595)^2 / 350

                   = 48.28 oz                       unfavourable

Now, standard unit cost of shampoo per bath= $1.19

so, for 350 baths, standard cost of shampoo= $1.19*350

                                                                = 416.5

actual cost of shampoo= $558.25

thus, variance of cost of shampoo= (558.25-416.5)^2 / 350

                                                 = $57.41                        unfavourable

Now, standard quantity of water per bath= 15 gal

standard quantity of water for 350 baths= 15*350 gals

                                                         = 5250 gals

actual amount of water used= 6500 gals

thus, variance of quantity of water = (6500-5250)^2 / 350

                                                 = 4464.28 gal                         unfavourable

now, standard cost of water per bath= $ 0.75

standard cost of water for 350 baths= 0.75*350

                                                   = $262.5

actual cost of water for 350 baths= $455

thus, variance of cost of water= (455-262.5)^2 /350

                                          =$105.87                                    unfavourable

2) standard cost of labour per bath= $10.5

standard cost of labour for 350 baths= $10.5*350

                                                     = $3675

actual cost= $3306

thus, variance for labour cost= (3306-3675)^2 / 350

                                          = $1.05                            favourable since actual cost is less than the standard cost

now, standard hour of labour used for each bath= 1.05 hr

standard hours of labour for 350 baths= 1.05*350

                                                     = 367.5 hrs

actual hours= 290 hours

thus, variance= (-367.5+290)^2 / 350

                     = 17.16 hours                          favourable since actual hours is less than the standard hours

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