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: Shampoo Water Direct labor Standard Quantity Standard Rate 2.7 oz. $ 0.30 per oz. 25 gal. $ 0.05 per gal. 1.55 hr. $12.00 per hr. Standard Unit Cost $ 0.81 1.25 18.60 During the month of July, Collin's employees gave 450 baths. The actual results were 775 ounces of shampoo used (cost of $286.75), 7,500 gallons of water used (cost of $600), and labor costs for 390 hours (cost of $5,226). Required: 1. Calculate Suds & Cuts direct materials variances for both shampoo and water for the month of July. 2. Calculate Suds & Cuts direct labor variances for the month of July. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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, and "None" for no effect (i.e., zero variance).) Shampoo Water Direct Material Price Variance Direct Material Quantity Variance < Required 1 Required 2 >

Answer 1

1) Direct material variance

	Shampoo		Water
Direct material price variance	(0.30*775-286.75) = 54.25	Unfavorable	(.05*7500-600) = 225	Unfavorable
Direct material quantity variance	(450*2.7--775)*0.30 = 132	Favorable	(450*25-7500)*.05 = 187.50	Favorable

2) Direct labor rate variance = (12*390-5226) = 546 Unfavorable

Direct labor efficiency variance = (450*1.55-390)*12 = 3690 Favorable