3 Problem 10-15 (Algo) Comprehensive Variance Analysis (L010-1, LO10-2, LO10-3) 56 Miller Toy Company manufactures a plastic swimming pool at Its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: eBook Sales (8,088 pools) Variable expenses: Variable cost of goods sold Variable selling expenses Total variable expenses Contribution margin Fixed expenses! Manufacturing overhead Selling and administrative Total fixed expenses Net operating income (Loss) Flexible Budget Actuat $ 240,000 $240,000 94,000 112,470 10, cee 10,000 184,000 122,470 136,000 117,538 Print 55,000 55,000 70,000 70,000 125, eee 125,00 $ 11,000 $ 17,470) References *Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control Upon reviewing the plant's 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 Standard Quantity or Standard Price Standard Hours or Rate Cost Direct materials 3.5 pounds $ 2.50 per pound $ 8.75 Direct labor 0.4 hours $ 6.50 per hour 2.60 Variable manufacturing overhead 0.2 hours $ 2.00 per hour 0.40 Total standard cost per unit $11.75 "Based on machine-hours. During June, the plant produced 8,000 pools and incurred the following costs: a. Purchased 33.000 pounds of materials at a cost of $2.95 per pound Used 27.800 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be c. Worked 3,800 direct labor-hours at a cost of $6.20 per hour. d. Incurred variable manufacturing overhead cost totaling $4,560 for the month. A total of 1,900 machine-hours was recorded. Standard Quantity or Standard Price Standard Hours or Rate Cost Direct materials 3.5 pounds $ 2.50 per pound $ 8.75 Direct labor 0.4 hours $ 6.50 per hour 2.60 Variable manufacturing overhead 0.2 hours $ 2.00 per hour 8.40 Total standard cost per unit $11.75 "Based on machine-hours. During June, the plant produced 8,000 pools and incurred the following costs: a. Purchased 33,000 pounds of materials at a cost of $2.95 per pound. b. Used 27,800 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be c Worked 3,800 direct labor-hours at a cost of $6.20 per hour. a. Incurred variable manufacturing overhead cost totaling $4,560 for the month. A total of 1,900 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. Materials price and quantity variances. b. Labor rate and efficiency variances Variable overhead rate and efficiency variances, 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. Complete this question by entering your answers in the tabs below. Required Required 2 1a. Compute the following variances for June, materials price and quantity variances, 1b. Compute the following variances for June, labor rate and efficiency variances ic. Compute the following variances for June, variable overhead rate and efficiency variances (Do not round your intermediate calculations, Indicate the effect of each variance by selecting for favorable. "U" for unfavorable, and "None for no effect the zero variance). Input all amounts as positive values.) Show less 1aMaterial price variance