Homework- Chapter 10 0 Saved 7 References 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 Sales (6,000 pools) $ 265,000 $ 265,000 Variable expenses: Variable cost of goods sold* 95,580 112,700 Variable selling expenses 14,000 14,000 Total variable expenses 109,580 126,700 Contribution margin 155,420 138,300 Fixed expenses: Manufacturing overhead 63,000 63,000 Selling and administrative 78,000 78,000 Total fixed expenses 141,000 141,000 Net operating income (loss) $ 14.420 $ (2.739) 'Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn. who hasjust 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 Standard Price or Standard or Hours Rate Cost Direct materials 3.9 pounds $ 2.30 per pound $ 8.97 Direct labor 0.8 hours $ 6.90 per hour 5.52 Variable manufacturing overhead 0.6 hours* 3; 2.40 per hour 1.44 Total standard cost per unit $ 15-93 'Based on machinehours. During June, the plant produced 6000 pools and incurred the following costs: a. Purchased 28,400 pounds of materials at a cost of $2.75 per pound. b. Used 23,200 pounds of materials in production. (Finished goods and work in process inventories are insignicant and can be ignored.) c. Worked 5,400 direct laborhours at a cost of$6.60 per hour. d. Incurred variable manufacturing overhead cost totaling $10,920 for the month. A total of 3,900 machinehours 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. c. Variable overhead rate and efciency 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 1 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 "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Show less 1a. Material price variance 1a. Material quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency varianceRequired 1 Required 2 Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None\" for no effect (i.e., zero variance). Input all amounts as positive values.)