E9-4 Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4]
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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 | oz. | $ | 0.10 | per oz. | $ | 0.20 |
| Water | 20 | gal. | $ | 0.05 | per gal. | 1.00 | |
| Direct labor | 0.75 | hr. | $ | 9.00 | per hr. | 6.75 | |
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During the month of July, Collin’s employees gave 360 baths. The actual results were 725 ounces of shampoo used (cost of $116), 6,500 gallons of water used (cost of $455), and labor costs for 230 hours (cost of $2,300). |
| 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.) |
