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: Flexible Budget Actual $180,000 $180,000 Sales (4,000 pools) Variable expenses: Variable cost of goods sold* 37,720 49,210 15,000 15,000 Variable selling expenses Total variable expenses Contribution margin Fixed expenses: -52 72064,210 127,280 115,790 Manufacturing overhead Selling and administrative Total fixed expenses Net operating income (loss) 51,000 51,000 66,000 66,000- 117,000 117,000 $ 10,280 $ (1,210) 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 Standard Price Standard or Rate Cost Direct materials 3.1 pounds 0.4 hours 2.10 per pound 6.10 per hour 6.51 2.44 0.48 Direct labor Variable manufacturing overhead 0.3 hours* 1.60 per hour 9.43 Total standard cost per unit Based on machine-hours During June, the plant produced 4,000 pools and incurred the following costs a. Purchased 17,400 pounds of materials at a cost of $2.55 per pound b. Used 12,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 2,200 direct labor-hours at a cost of $5.80 per hour d. Incurred variable manufacturing overhead cost totaling $3,000 for the month. A total of 1,500 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 b. Labor rate and efficiency variances c. Variable overhead rate and efficiency variances 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month