Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Check Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution
Check 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: Flexible Budget Actual 5200,000 $200,000 Sales (5,000 pools) Variable expenses: Variable cost of goods solde Variable selling expenses Total variable expenses Contribution margin Fixed expenses : Manufacturing overhead Selling and administrative Total fixed expenses Net operating income (loss) 54,100 16,000 70,180 129,900 67,330 16,000 83,330 116,679 52,000 52,000 67,000 67,000 119,000 119,000 $ 10,900 $ 12,330) Cost $7.94 *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 or Rate Hours Direct materials 3.2 pounds 5 2.20 per pound Direct labor 0.5 hours $ 6.20 per hour 3.10 Variable manufacturing overhead 0.4 hours. $ 1.70 per hour 0.68 Total standard cost per unit "Based on machine-hours. During June, the plant produced 5.000 pools and incurred the following costs: a. Purchased 21000 pounds of materials at a cost of $2.65 per pound b. Used 15,800 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be ignorod) c Worked 3100 direct labor hours at a cost of $5.90 per hour $10.82
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started