Acc346 Managerial Accounting: P11-3 Sarah Aiken is the owner of Pretty Paws
Acc346 Managerial Accounting Week 6 Homework PROBLEM 11-3. Labor Variances: Service Firm Sarah Aiken is the owner of Pretty Paws, a dog-grooming service. At standard, it takes 1 hour to groom each dog. During the month of October, it took Pretty Paws employees 345 hours to groom 300 dogs at a total labor cost of $6,072. In November, employees spent 355 hours to groom 310 dogs at a total labor cost of $6,313.50; in December, 360 hours were used to groom 330 dogs at a total labor cost of $6,532. The wage rate standard for groomers is $17.75 per hour.
a. Calculate the labor rate and efficiency variances for each of the past three months. b. What trends can you spot regarding the variances over the past three months? What might be a cause for the labor rate variance? What might be a cause for the labor efficiency variance?