Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The standard cost for one pool is as follows: Standard Quantity or Standard Hours Standard Price or Rate Cost Direct materials 1.60 kilograms $4.00 per kilogram $ 6.40 Direct labour 0.80 hours $6.00 per hour 4.80 Variable manufacturing overhead 0.50 machinehours $3.00 per machinehour 1.50 Total standard cost $12.70 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 Actual Sales (14,800 pools) $444,000 $444,000 Less: Variable expenses: Variable cost of goods sold* 187,960 195,015 Variable selling expenses 19,700 19,700 Total variable expenses 207,660 214,715 Contribution margin 236,340 229,285 Less: Fixed expenses: Manufacturing overhead 128,000 128,000 Selling and administrative 82,380 82,880 Total fixed expenses 210,880 210,880 Net income $ 25,460 $ 18,405 *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. 31,500 kilograms of materials were purchased at a cost of $3.80 per kilogram. b. 24,700 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignicant and can be ignored.) c. 11,700 direct labour-hours were worked at a cost of $7 per hour. d. Variable manufacturing overhead cost totalling $20,615 for the month was incurred. A total of 5,890 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).) Labouremencyvan-ance __ c. Variable overhead spending and efciency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero 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 2-b. What impact did this figure have on the company's income statement? This will cause the Cost of Goods Sold to thereby net income by that amount.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 mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) B Materials price variance B Materials quantity variance a Labour rate variance a Variable overhead efciency variance a Variable overhead spending variance a Labour efficiency variance 4. Compute the fixed overhead cost variances. (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 5. This part of the question is not part of your Connect assignment