Mansbridge Moldings manufactures a plastic wagon at its Muskoka Plant. The standard cost for one wagon is as follows: Direct materials Standard Quantity or Hours 1.40 kilograms 0.80 hours Standard Price or Rate $5.00 per kilogram Direct labour $6.00 per hour Variable manufacturing overhead 0.40 machine-hours $2.00 per machine-hour Total standard cost Standard Cost $ 7.00 4.80 0.80 $12.60 The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 14,800 pools; the normal volume is 14,950 pools per month. Fixed costs are allocated using machine-hours. Sales (14,800 pools) Less: Variable expenses: Variable cost of goods sold* Variable selling expenses Total variable expenses Contribution margin Less: Fixed expenses: Manufacturing overhead. Selling and administrative Total fixed expenses Net income Flexible Budgeted $ 444,000 Actual $444,000 186,480 193,250 19,700 19,700 206,180 212,950 237,820 231,050 128,000 128,000 82,880 82,880 210,880 210,880 $ 26,940 $ 20,170 *Contains direct materials, direct labour, and variable manufacturing overhead. Enter Machida of the Munka Saved Help Save & Exit *Contains direct materials, direct labour, and variable manufacturing overhead. Peter Mansbridge, the general manager of the MuskokaPlant, wants to get things under control. He needs information about the operations in June since the income statement signalled that the problem could be due to the variable cost of goods sold. He obtains the following information about the operations and costs in June: a. 31,200 kilograms of materials were purchased at a cost of $4.00 per kilogram. b. 24,500 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 11,800 direct labour-hours were worked at a cost of $7 per hour. d. Variable manufacturing overhead cost totalling $19,350 for the month was incurred. A total of 4,300 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. Direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Material price variance Material quantity variance a. Direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) 09 Material price variance Material quantity variance b. Direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance c. Variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Variable overhead spending variance Variable overhead efficiency variance