Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The standard cost for one pool is as follows: Direct materials Direct labour Standard Quantity or Hours 1.20 kilograms 0.80 hours machine- 0.30 hours Standard Price or Rate $5.00 per kilogram $4.00 per hour Standard Cost $ 6.00 3.20 Variable manufacturing overhead $3.00 per machine-hour 0.90 Total standard cost $ 10.10 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. Flexible Budgeted $ 444,000 Sales (14,800 pools) Actual $ 444,000 Less: Variable expenses: Variable cost of goods sold* Variable selling expenses 149,480 19,700 156,270 19,700 Total variable expenses 169,180 175,970 Contribution margin 274,820 268,030 Less: Fixed expenses: Manufacturing overhead Selling and administrative 128,000 82,880 128,000 82,880 Total fixed expenses 210,880 210,880 Net income $ 63,940 $ 57,150 * 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 June since the income statement signalled that the problem could be due to the variable cost of goods sold. Dunn learns the following about operations and costs in June: a. 30,100 kilograms of materials were purchased at a cost of $3.70 per kilogram. b. 24,200 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 $5 per hour. d. Variable manufacturing overhead cost totalling $15,400 for the month was incurred. A total of 4,400 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" 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 2-a. Summarize the variances you computed in part (1) by showing the net overall 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 (i.e., zero variance).) Net variance 4. Compute the fixed overhead cost variances. (Round intermediate calculation to 2 decimal places. Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Fixed overhead budget variance Fixed overhead volume variance