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:

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.
2. Calculate Suds & Cuts direct labor variances for the month of July.
3. Identify a possible cause of eachvariance.

Transcribed Image Text:

Standard Rate Standard Unit Cost Shampoo Water Direct labor Standard Quantity 2 oz. 20 gal. 0.75 hr. $0.10 per oz. $0.05 per gal. $9.00 per hr. $0.20 1.00 6.75