Mansbridge Moldings manufactures a plastic wagon at its MuskokaPlant. The standard cost for one wagon is as follows: Standard Quantity or Hours 1.30 kilograms Standard Price or Rate $5.00 per kilogram Standard Cost Direct materials Direct labour 0.90 hours $5.00 per hour Variable manufacturing overhead 0.40 machine-hours $4.00 per machine-hour Total standard cost $ 6.50 4.50 1.60 $12.60 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. Sales (15,100 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 incone Flexible Budgeted $ 453,000 Actual $ 453,000 190,260 206,893 20,100 20,100 210,360 226,993 242,640 226,007 131,000 131,000 84,560 84,560 215,560 $ 27,080 215,560 $ 10,447 *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. 30,200 kilograms of materials were purchased at a cost of $3.90 per kilogram. b. 24,600 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 11,600 direct labour-hours were worked at a cost of $8 per hour. d. Variable manufacturing overhead cost totalling $24,313 for the month was incurred. A total of 5,930 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 b. Direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" fo unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance h C Prev 1 of 17 Next> DELL E R T Y 8 13 6 home D F G H J K L 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