Rub-a-Dub Dogs is a local pet grooming shop owned by Max Aslett. Max has prepare

Question

Rub-a-Dub Dogs is a local pet grooming shop owned by Max Aslett. Max has prepared the following standard cost card for each dog bath given:

During the month of July, Max’s employees gave 345 baths. The actual results were 725 ounces of shampoo used (total cost $87), 6,500 gallons of water used (cost of $390), and labor costs for 250 hours (cost of $2,300).

Calculate Rub-a-Dub Dogs’ direct materials variances for both shampoo and water for the month of July. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answers to 2 decimal places. Do not round intermediate calculations. Omit the "$" sign in your response.)

Calculate Rub-a-Dub Dogs’ direct labor variances for the month of July. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answer to 2 decimal places. Do not round intermediate calculations. Omit the "$" sign in your response.)

Standard Quantity Standard
Rate Standard
Unit Cost Direct costs Shampoo 2 oz $ 0.10 per oz $ 0.20 Water 20 gal 0.05 per gal 1.00 Direct labor .75 hr 9.00 per hr 6.75

Explanation / Answer

Shampoo:

Direct materials price variance (MPV) formula:

[Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price)]

ie MPV (Shampoo)= $87 - 725*$0.1 = $14.5U

Materials quantity Usage variance (MQV) Formula:

[Materials quantity variance = (Actual quantity used × Standard price) - (Standard quantity allowed × Standard Price)]

ie MQV(Shampoo) = 725*$0.1 - (2*345)*$0.1 = $3.5U

Water:

Direct materials price variance (MPV) formula:

[Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price)]

ie MPV (Water)= $390 - 6500*$0.05 = $65U

Materials quantity Usage variance (MQV) Formula:

[Materials quantity variance = (Actual quantity used × Standard price) - (Standard quantity allowed × Standard Price)]

ie MQV(Water) =6500*$0.05 - (345*20)*$0.05 = -$20 = $20F

Formula of labor efficiency variance (LEV) :

[Labor efficiency variance = (Actual hours worked × Standard rate) - (Standard hours allowed × Standard rate)]

ie LEV = 250*$9 - 345*0.75*$9 = -78.75 =$78.75F

Direct Labor Rate Variance (DLRV) Formula:

[Labor rate variance = (Actual hours worked × Actual rate) - (Actual hours worked × Standard rate)]

ie DLRV = $2300 - 250*$9 = $50U

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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