10 points 1 Direct materials Direct labour Bernino Pools manufactures a plastic swimming pool at its Westdale Plant. The standard cost for one pool is as follows: Standard Quantity or Hours 1.30 kilograms 0.90 hours Standard Price or Rate $5.00 per kilogram Standard Cost $ 6.50 Variable manufacturing overhead 0.40 machine-hours $5.00 per hour $4.00 per machine-hour 4.50 1.60 Total standard cost $12.60 8 01:51:05 The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,100 pools; the normal volume is 15,250 pools per month. Fixed costs are allocated using machine-hours. Sales (15,100 pools) Less: Variable expenses: Variable cost of goods sold* Variable selling expenses Total variable expenses Contribution margin Less: Fixed expenses: Manufacturing overhead Selling and administrative Total fixed expenses Net income Flexible Budgeted $ 453,000 190,260 20,100 Actual $ 453,000 206,893 20,100 210,360 226,993 242,640 226,007 131,000 131,000 84,560 215,560 84,560 215,560 $ 27,080 $ 10,447 *Contains direct materials, direct labour, and variable manufacturing overhead. Janet Dunn, the general manager of the Westdale Plant, wants to get things under control. She needs information about the operations in June since the income statement signalled that the problem could be due to the variable cost of goods sold. Dunn learns the following about operations and costs in June: a. 30,200 kilograms of materials were purchased at a cost of $3.90 per kilogram. b. 24,600 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 11,600 direct labour-hours were worked at a cost of $8 per hour. d. Variable manufacturing overhead cost totalling $24,313 for the month was incurred. A total of 5,930 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Direct materials price and quantity variances. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Material price variance Material quantity variance b. Direct labour rate and efficiency variances. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Labour rate variance Labour efficiency variance c. Variable overhead spending and efficiency variances. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Variable overhead spending variance Variable overhead efficiency variance