Flexible Budget Actual $235,000 $235,000 3 Sales (5,000 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 incone (loss) 71,350 86,370 13.ee 13,000 84,358 99,370 150,65 135,630 62,eee 62,00 77,000 77.600 139,00 139,000 11,650 $ (3,370) Print Raven *Contains direct materials, direct labor, and varisble manufacturing overhesd. 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 hos 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 materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Standard Price Standard Hours or Rate Cost 3.8 pounds $2.20 per pound $ 8.36 0.7 hours $6.80 per hour 4.76 0.5 hours* $2.30 per hour 1.15 $14.27 *Based on machine-hours. During June the plant produced 5.000 pools and incurred the following costs: 2. Purchased 24.000 pounds of materials at a cost of $265 per pound. b. Used 18.800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) C. Worked 4.100 direct labor-hours at a cost of $6.50 per hour. d. Incurred variable manufacturing overhesd cost totaling $7.560 for the month. A total of 2,800 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 veriences for June: 9. Materials price and quantity variances. b. Labor rate and efficiency variances. c. 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 i Required 2 la. Compute the following variances for June, materials price and quantity variances. 1b. Compute the following variances for June, labor rate and efficiency variances 1c 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 (.e, zero variance). Input all amounts as positive values.)
