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 Quantity Standard Rate Standard Unit Cost

Shampoo 2.1 oz. $ 0.40 per oz. $ 0.84

Water 19 gal. $ 0.06 per gal. 1.14

Direct labor 1.25 hr. $ 11.00 per hr. 13.75

During the month of July, Collin’s employees gave 390 baths. The actual results were 745 ounces of shampoo used (cost of $372.50), 6,900 gallons of water used (cost of $552), and labor costs for 330 hours (cost of $4,026).

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.)

Shampoo

Direct Material Price: U or F

Direct Material Quantity Price: U or F

Water

Direct Material Price: U or F

Direct Material Quantity Price: U or F

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.)

Direct Labor Rate: U or F

Direct Labor Effiency: U or F

Please show work!

Explanation / Answer

1a Shampoo Material Price Variance (Standard Price - Actual Price) X Actual Quantity Consumed = [(0.40 - (372.5/745)] X 745 Ounces = [0.4 - 0.5] X 745 ounces = 74.5 Unfavourable Material Quantity Variance (Standard Quantity for Actual Output - Actual Quantity) X Standard Price = [(390 x 2.1) - 745] X 0.40 = [819 - 745] X 0.40 = 29.60 Favourable 1b Water Material Price Variance (Standard Price - Actual Price) X Actual Quantity Consumed = [(0.06 - (552/6900)] X 6900 gallons = [0.06 - 0.08] X 6900 gallons = 138 Unfavourable Material Quantity Variance (Standard Quantity for Actual Output - Actual Quantity) X Standard Price = [(390 x 19) - 6900] X 0.06 = [7410 - 6900] X 0.06 = 30.60 Favourable 2 Labour Rate Variance (Standard rate - Actual rate) X Actual Hours = [11 - (4026/330)] X 330 hours = [11.00 - 12.20] X 330 hours = 396 Unfavourable Labour Efficieny Variance (Standard Hours for Actual Output - Actual Hours worked ) X Standard rate = [(390*1.25) - 330] X 11.00 = [(487.5 - 330] X 11.00 = 1,733 Favourable

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