Rub-a-Dub Dogs is a local pet grooming shop owned by Max Aslett. Max has prepared the following standard cost card for each dog bath given:

During the month of July, Max’s employees gave 345 baths. The actual results were 725 ounces of shampoo used (total cost \($87),\) 6,500 gallons of water used (cost of \($390),\) and labor costs for 250 hours (cost of \($2,300).\)

Required:

1. Calculate Rub-a-Dub Dogs’ direct materials variances for both shampoo and water for the month of July.

2. Calculate Rub-a-Dub Dogs’ direct labor variances for the month of July.

3. Identify a possible cause of each variance.

Transcribed Image Text:

Standard Quantity Standard Rate Standard Unit Cost Direct costs Shampoo Water 2 oz. $0.10 per oz. 20 gal. Direct labor .75 hr. $0.20 0.05 per gal. 1.00 9.00 per hr. 6.75