Mansbridge Moldings manufactures a plastic wagon at its MuskokaPlant. The standard cost for one wagon is as follows: Direct materials Standard Quantity or Hours 1.20 kilograms 0.80 hours Direct labour Variable manufacturing overhead 0.40 machine-hours Total standard cost Standard Price or Rate $4.00 per kilogram $6.00 per hour $3.00 per machine-hour Standard Cost 64.80 4.80 1.20 $10.80 The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,100 pools; the normal volume is 15,250 pools per month. Fixed costs are allocated using machine-hours. Flexible Budgeted Actual Sales (15,100 pools) 453,000 #453,000 Less: Variable expenses: Variable cost of goods sold 163,080 201,835 Variable selling expenses 20,100 20,100 Total variable expenses 183,180 221,935 Contribution margin 269,820 231,065 Leas: Fixed expenses: Manufacturing overhead 131,000 131,000 Selling and administrative 84,560 24,560 Total fixed expenses 215,560 215,560 Net income #54,260 15,505 "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: 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. 30,100 kilograms of materials were purchased at a cost of $3.90 per kilogram. b. 22,000 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 11,900 direct labour-hours were worked at a cost of $8 per hour. d. Variable manufacturing overhead cost totalling $21,645 for the month was incurred. A total of 5,850 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 Matenal 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