2-Comprehensive Variance Analysis-GC Toy Company manufactures a plastic swimming pool. The company has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (3,000 pools) $179,000 $179,000 Variable expenses: Variable cost of goods sold 33,390 44,540 Variable selling expenses 11,000 11,000 Total variable expenses 44,390 55,540 Contribution margin Fixed expenses: Manufacturing overhead 134,610 123,460 50,000 50,000 Selling and administrative Total fixed expenses Net operating income (loss) 75,000 75,000 125,000 125,000 $ 9,610 $ (1,540) "Contains direct materials, direct labor, and variable manufacturing overhead. Sharon Lymon, who has just been appointed general manager of the manufacturing facility, has been given Instructions to "get things under control." Upon reviewing the income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct labor Direct materials Variable manufacturing overhead Total standard cost per unit "Based on machine-hours. Standard Quantity or Hours Standard Price or Rate Standard Cost 3.6 pounds $2.00 per pound $7.20 0.5 hours $6.60 per hour 3.30 0.3 hours $2.10 per hour 0.63 $11.13 During June the plant produced 3,000 pools and incurred the following costs: a. Purchased 15,800 pounds of materials at a cost of $2.45 per pound. b. Used 10,600 pounds of materials in production. (Finished goods and work in process inventories are Insignificant and can be ignored.) c. Worked 2,100 direct labor-hours at a cost of $6.30 per hour. d. Incurred variable manufacturing overhead cost totaling $3,000 for the month. A total of 1,200. machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Compute the following variances for June (show your work): Materials price and quantity variances. 1. a. b. Labor rate and efficiency variances. 2. Variable overhead rate and efficiency variances Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month