E9-4 Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4]

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

During the month of July, Collins 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.)