Miller Toy Company manufactures a estic swimming pool at its Westwood Plant. The standard cost for one pool is as follows Santy Standard CALE Crec meris rect lub Variable facturing overhead Total standard cost 1. Llore 2. O hours 140 chinhos indir 35.00 peopren $6.4 per 52. per machine-hour 4. . 2.0 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 14.950 pools per month Fixed costs are located using machine hours File Norted SE4.000 Actual 144,000 106,450 10.200 20 Sales (14,200 pools) LESE Verable expenses Variable cost of prodle Verta selline preses Total areas Contribution List Flexpenses ufacturing vertet Selling and strative Total despeses et non 193,250 19,700 212.950 231 120,000 210 EBD 120,000 02 220 $ 20.170 Contains direct materials, direct labour and variable manufacturing overhead Janet Dunn the general manager of the Westwood Plant, wants to get things under control. She needs information about the operations in Bune since the income statement signaled that the problem could be due to the variable cost of goods sold. Dunn leams the following about operations and costs in June a 31200 kilograms of materials were purchased at a cost of $400 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. 11800 direct labour-hours were worked at a cost of 57 per hout d Variable manufacturing overhead cost totalling 519,350 for the month was incurred. A total of 4300 machine-hours was recorded mes 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 " for favourable. "U" for unfavourable, and "None" for no effecte.zero variance):) Answer is complete but not entirely correct. Material price variance Molla variance 5 31.500F $ 13.000 U . b. Direct labour role and efficiency variances Indicate the effect of each variance by selecting for favourable. "Ufor unfavourable, and None for no effectie ero variancel Answer is not complete Labour tale vatance Labour elency variance c. Variatie overhead spending and efficiency variances (indicate the effect of each variance by selecting for favourable. "U"tor unfavourable, and "None" for no effect (Lezere variance Answer is not complete U Variable overhead spending variance Variable overhead oticiency variance 2- Sammartre the variances you computed in part by showing the net overal favourable or unfavourable variance for the month. (Indicate the effect of variance by selecting "F* for favourable. "U" for unfavourable, and "None" for no effect zero variance Answer is not complete 2.b. What impact did this figure have on the company's income statement? Answer is complete and correct. decreasing DG goup 3. Pick out the two most significant variances you computed in part (1). You may select more than one answer. Single click the box with the question merk to produce e check mark for a correct answer and double click the box with the question mark to empty the box for wrong answer. Any boxes left with a question mark will be automatically graded as incorrect) Materials pece verance Mistrace Labour rate orice Variable vorheed emcy wrance Variable had spending warance abour efficiency ance 4. Compute the fixed overhead cost viances indicate the effect of variance by selecting for favourable. "U" for unfavourable and "None" for no effect, Tere variancel Answer is not complete Fixed vead budget arance Fred uvehead vorence U
