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:

During the month of July, Collin’s employees gave 430 baths. The actual results were 765 ounces of shampoo used (cost of $153.00), 7,300 gallons of water used (cost of $584), and labor costs for 370 hours (cost of $4,551).

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.)

Standard Quantity Standard Rate Standard Unit Cost Shampoo 2.5 oz. $ 0.10 per oz. $ 0.25 Water 23 gal. $ 0.04 per gal. 0.92 Direct labor 1.45 hr. $ 11.00 per hr. 15.95

Explanation / Answer

1. Suds & Cuts direct materials variances for both shampoo and water for the month of July is as calculated below:

2. Suds & Cuts direct labor variances for the month of July.

Shampoo Material Price Variance Actual Price Standard Price AP-SP Actual Quantity Variance (AP-SP)*Actual Qty 0.20 0.10 $0.10 765 76.50 Unfavourable (153/765) Material Usage Variance Actual Quantity Standard quantity AQ-SQ Standard Price Variance (AQ-SQ)*SP 765 1,075 -310 $0.10 -31.00 Favourable (430*2.5) Water Material Price Variance Actual Price Standard Price AP-SP Actual Quantity Variance (AP-SP)*Actual Qty 0.08 0.04 $0.04 7,300 292.00 Unfavourable (584/7,300) Material Usage Variance Actual Quantity Standard quantity AQ-SQ Standard Price Variance (AQ-SQ)*SP 7,300 9,890 -2,590 $0.04 -104 Favourable (430*23)

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