4. Part 1 of 3 Required Information Case 11-55 Comprehensive Variance Analysis Used to Explain Operational Results; Review of Chapters 10 and 11; Activity-Based Costing; Sales Variances (Appendix B) (LO 11-4, 11-5, 11-7, 11-9) [The following information applies to the questions displayed below.] Aunt Molly's Old Fashioned Cookies bakes cookies for retail stores. The company's best-selling cookle is chocolate nut supreme, which is marketed as a gourmet cookle and regularly sells for $7.00 per pound. The standard cost per pound of chocolate nut supreme, based on Aunt Molly's normal monthly production of 420,000 pounds, is as follows: 1.2 points eBook Quantity Standard Unit Cost Total Cost References Cost Item Direct materials: Cookie mix Milk chocolate Almonds 18 oz. 5 oz 1 oz. $ 0.06 per oz. 9.19 per oz. 9.54 per oz. $0.68 0.95 9.54 $2.09 Direct labor: Mixing Baking 1 min. 2 min. 14.40 per hr. 18.00 per hr. $0.24 @.60 $0.84 $1.62 3 min. 32.40 per direct-labor hr. Variable overheadt Total standard cost per pound $4.55 *Direct-labor rates Include employee benefits. Applied on the basis of direct-labor hours. Aunt Molly's management accountant, Karen Blair, prepares monthly budget reports based on these standard costs. April's contribution report, which compares budgeted and actual performance, is shown in the following schedule. Contribution Report for April Static Budget Actual Units (in pounds) 420,00 445, eee Revenue $2,940,000 $3,070,580 Direct material $ 877,880 $1,155,980 Direct labor 352,800 344,280 Variable overhead 688,480 647,787 Total variable costs $1,911, eae $2,147,967 Contribution margin $1,229,000 $ 922,533 Variance 25,00 F $130,500 F $278, 100 u 8,520 F 32,613 F $236,967 U $126,467 U Justine Madison, president of the company, is disappointed with the results. Despite a sizable Increase in the number of cookies sold, the product's expected contribution to the overall profitability of the firm decreased. Madison has asked Blair to identify the reason why the contribution margin decreased. Blair has gathered the following Information to help in her analysis of the decrease. Actual Cost Usage Report for April Cost Item Quantity Direct materials: Cookie mix 4,525,000 oz. Milk chocolate 2,650,800 oz. Almonds 460,000 oz. Direct labor: Mixing 445,800 min. Baking 791,60e min. Variable overhead Total variable costs $ 271,589 636,828 248, 400 106, 800 237, 488 647,787 $2,147,967 Case 11-55 Part 1 Required: 1. Prepare a new contribution report for April, in which: The static budget column in the contribution report is replaced with a flexible budget column. The varlances in the contribution report are recomputed as the difference between the flexible budget and actual columns. (Do not round your Intermediate calculations. Indicate the effect of each varlance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (I.e., zero varlance). Flexible Budget Actual Variance Units (in pounds) Revenue Direct material Direct labor Variable overhead Total variable costs Contribution margin Case 11-55 Part 2 2. What is the total contribution margin in the flexible budget column of the new report prepared for part (1)? (Do not round your Intermediate calculations. Round your final answer to the nearest whole dollar amount.) Total contribution margin Case 11-55 Part 4 4. What is the total varlance between the flexible budget contribution margin and the actual contribution margin in the new report prepared for part (1)? Calculate the total contribution margin variance by computing the following variances. (Assume that all materials are used in the month of purchase.). (Do not round your Intermediate calculations. Indicate the effect of each varlance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (1.e., zero variance).) a. Direct-material price variance. b. Direct-material quantity variance. c. Direct-labor rate variance. d. Direct-labor efficiency variance. e. Variable-overhead spending variance. f. Variable-overhead efficiency variance. g. Sales-price variance. Total