Chapter 9 hw XC Chegg Study | Guided Solut+ 2.00 points Suds & Cuts is a local p

ID: 2530460 • Letter: C

Question

Chapter 9 hw XC Chegg Study | Guided Solut+ 2.00 points Suds & Cuts is a local pet grooing shop owned by Collin Bark. Collin has prepared the following standard cost card for each dog bath given: Standard Unit Standard Quanlily dard Rale Cust Shamipoto Water Direct labor 11 gal. S0.01 per gal. 035 900 por hr 1.3 oz. 0.30 per oz. S0.39 0.41 765 During the morith of July, Collin's emplayees gave 310 baths. The actual results were 705 ournces of shampoo used (cost of S232.65), 8,100 gallons of water used (cost of S427), and labor costs for 250 hours (cost of $2,600) Required: 1. Calculate Suds & Cuts direct materla's varlances tor both shampoo and water tor the month of July. (Round your answers to 2 decimal places. Indicate the effect of each varlance by selecting"F" for favorable, "u" for unfavorable.) Water Direci Matenal Pice Vanance Direct Material Quanlity Variarnc 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.) Lireci Labor Rate Variance Direcd Labor Elficisricy VariaICe O Type here to search 644 PM 4/24/2018

Explanation / Answer

Shampoo

Water

Direct Material Price Variance

$ 21.15

$ 183

Direct Material Quantity Variance

$ 90.60

$ 107.60

Direct Labor Rate Variance

$350

Direct Labor Efficiency Variance

$121.50

Explanation:

Material price variance (Shampoo):

Actual price of direct material = cost of direct material used/actual quantity used

= $ 232.65/705 = $ 0.33 per ounce

Direct material price variance (Shampoo) = (Actual price – Standard price) x Actual quantity

= ($ 0.33 - $ 0.30) x 705 = $ 0.03 x 705 = $ 21.15 U

Material price variance (Water):

Actual price of direct material = cost of direct material used/actual quantity used

= $ 427/6,100 = $ 0.07 per gallon

Direct material price variance (Water) = (Actual price – Standard price) x Actual quantity

= ($ 0.07 - $ 0.04) x 6,100 = $ 0.03 x 6,100 = $ 183 U

Material quantity variance (Shampoo):

Standard quantity of material per unit = 1.3 oz

Standard quantity of material for 310 units = 1.3 x 310 = 403 oz

Material quantity variance (Shampoo) = (Actual quantity - Standard quantity) x Standard price per unit

= (705 – 403) x $ 0.3 = 302 x $ 0.3 = $ 90.60 U

Material quantity variance (Water):

Standard quantity of material per unit = 11 gal.

Standard quantity of material for 310 units = 11 x 310 = 3,410 gal.

Material quantity variance (Water) = (Actual quantity - Standard quantity) x Standard price per unit

= (6,100 – 3,410) x $ 0.3 = 2,690 x $ 0.04 = $ 107.60 U

Actual labor rate = Total labor cost/No. of labor hours = $ 4,600/250 = $ 10.40 per hr

Direct Labor Rate Variance = (Actual rate - Standard rate) × Actual hour

= ($ 10.40 - $ 9) x 250 = $ 1.40 x 250 = $ 350 U

Standard hours per unit = 0.85 hr

Standard hours for 310 unit = 0.85 hr x 310 = 263.5 hrs

Direct Labor Efficiency Variance = (Actual hours - Standard hours) x Standard rate

= (250 - 263.5) x $ 9 = - 13.5 x $ 9 = - $ 121.50 F