Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The standard cost for one pool is as follows: Required: 3. Pick out the two most significant variances you computed in part (1). (You may 1. Compute the following variances for June: Standard Quantity or Standard Price or Standard select more than one answer. Single click the box with the question mark to produce Hours Rate Cost a check mark for a correct answer and double click the box with the question mark Direct materials 1. 40 kilograms $5.00 per kilogram $ 7.00 a. Direct materials price and quantity variances. (Indicate the effect of each variance to empty the box for a wrong answer. Any boxes left with a question mark will be Direct labour 0 _ 80 hours $6.00 per hour 4.80 by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (Le., automatically graded as incorrect.) Variable manufacturing 0. 40 machine-hours $2.00 per machine- zero variance).) overhead hour 0. 80 check all that apply Total standard cost $12. 60 Material price variance Materials price variance Material quantity variance Materials quantity variance The plant has been experiencing problems for some time, as is shown by its June Labour rate variance Variable overhead efficiency variance income statement when it made and sold 14,800 pools; the normal volume is 14,950 . . Variable overhead spending variance pools per month. Fixed costs are allocated using machine-hours. Labour efficiency variance Flexible b. Direct labour rate and efficiency variances. (Indicate the effect of each variance by Budgeted Actual selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero 1. Compute the fixed overhead cost variances. (Indicate the effect of variance by Sales (14, 800 pools) S 444, 000 $444, 000 variance).) selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (Le., zero Less: Variable expenses: variance).) Labour rate variance Variable cost of goods sold* 186, 480 193, 250 Labour efficiency variance Variable selling Fixed overhead budget variance expenses 19, 700 19, 700 Total variable expenses 206, 180 212, 950 Contribution margin 237, 820 231 , 050 c. Variable overhead spending and efficiency variances. (Indicate the effect of each Fixed overhead volume variance Less: Fixed expenses: variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no Manufacturing overhead 128, 000 128, 000 Selling and effect (Le., zero variance).) administrative 82, 880 82, 880 Variable overhead spending variance Total fixed expenses 210, 880 210, 880 Variable overhead efficiency variance Net income 26, 940 $ 20, 170 Contains direct materials, direct labour, and variable manufacturing overhead. 2-a. Summarize the variances you computed In part (1) by showing the net overall Janet Dunn, the general manager of the Westwood Plant, wants to get things under favourable or unfavourable variance for the month. (Indicate the effect of variance by control. She needs information about the operations in June since the income selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero statement signalled that the problem could be due to the variable cost of goods sold. variance]. Dunn learns the following about operations and costs in June: Net variance H a. 31,200 kilograms of materials were purchased at a cost of $4.00 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. 11,800 direct labour-hours were worked at a cost of $7 per hour. d. Variable manufacturing overhead cost totalling $19,350 for the month was incurred. A total of 4,300 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a.monthly. basis. Page 1 of 3 Page 2 of 3 Page 3 of