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: Sales (4,000 pools) Budgeted $ 239,000 Actual $239,000 Variable expenses: Variable cost of goods sold" Variable selling expenses 57,680 16,000 73,680 70,390 16,000 Total variable expenses 86,390 Contribution margin 165,320 152,610 Fixed expenses: Manufacturing overhead Selling and administrative Total fixed expenses 72,000 72,000 82,000 82,000 154,000 154,000 $ 11,320 $ (1,390) Net operating income (loss) "Contains direct materials, direct labor, and variable manufacturing overhead Janet Dunn, who has just 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 or Hours 3.2 pounds 0.6 hours 0.5 hours Direct materials Direct labor Variable manufacturing overhead Standard Price or Rate $2.70 per pound $7.30 per hour $2.80 per hour Standard Cost $ 8.64 4.38 140 Total standard cost $ 14.42 *Based on machine-hours. During June the plant produced 4,000 pools and incurred the following costs: a. Purchased 17,800 pounds of materials at a cost of $3.15 per pound. b. Used 12,600 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 3,000 direct labor-hours at a cost of $7.00 per hour d. Incurred variable manufacturing overhead cost totaling $7,360 for the month. A total of 2,300 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. Materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.o., zero variance).) Material price variance Material quantity variance b. Labor rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.o., zero variance).) Labor rate variance Labor efficiency variance C. 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 (.e., zero variance).) Variable overhead rate variance Variable overhead efficiency variance 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. (Input all values as positive amounts. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (le, zero variance).) Summary of variances: Material price variance Material quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance Net variance 3. Pick out the two most significant variances that you computed in (1) above. (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Materials price variance 7 Labor efficiency variance Variable overhead efficiency variance Labor rate variance 2 Variable overhead rate variance 2 Materials quantity variance