Finder File Edit View Go Window Help 79 E Sat Jun 30 423

Finder File Edit View Go Window Help ? ? ÷ 79%),.. E ) Sat Jun 30 4:23 PM Alex ezto.mheducation.com Home alamo.edu McGraw-Hill Connect Chapter 9 Exercises 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 QuantityStandard RateUnit Cost Standard Shampod Water Direct labor 2.5 oz. $0.10 per oz 23 gal. $ 0.04 per gal. $ 0.25 0.92 15.95 1.45 hr. $11.00 per hr 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 S584), 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.) Shampoo Water Direct Material Price Variance Direct Material Quantity Variance 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 Variance Direct Labor Efficiency Variance afari.dmg 0

Solution

1) Shampoo Water Direct Material Price Variance $       76.50 U $   292.00 U Direct Material Quantity Variance $       31.00 F $   103.60 F Working: a. Direct Material Price Variance = (Standard Price - Actual Price)*Actual Material Quantity Actual Rate of Materials: Shampoo Actual Costs / Actual units used = $        153 / 765 = $       0.20 Water Actual Costs / Actual units used = $        584 / 7300 = $       0.08 Now, Direct Material Price Variance: Shampoo = (0.10-0.20)*765 = $     76.50 U Water = (0.04-0.08)*7300 = $   292.00 U b. Direct Material Quantity variance = (Standard Quantity-Actual Quantity)*Standard Material Price Standard Quantity of: Actual Units produced x Standard Quantity per unit = Standard Quantity in total Shampoo 430 x 2.5 =         1,075 Water 430 x 23 =         9,890 Now, Direct Material Quantity variance of: Shampoo (1075-765)*0.10 = $    31.00 Water (9890-7300)*0.04 = $ 103.60 2) Direct Labor rate Variance $ 481 F Direct Labor efficiency variance $       2,789 F Woking: Direct Labor rate Variance = (Standard Rate-Actual rate)*Actual Labor hours = (12.30-11.00)*370 = $     481.00 Actual Labor rate = Actual Labor costs /Actual Labor hours = $       4,551 / 370 = $       12.30 Standard Labor hours = Actual Units produced x Standard labor hour per unit = 430 x 1.45 =         623.50 Direct Labor efficiency variance = (Standard Labor hours - Actual Labor hours)*Stadard Labor rate = (623.50-370)*11.00 = $ 2,788.50