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 $ 235,eee 5 235,000 Sales (7,000 pools) variable expenses: variable cost of goods sold variable selling expenses Total variable expenses Contribution margin Fixed expenses! Manufacturing overhead Selling and administrative Total fixed expenses wet operating income (less) 78,540 18, 96,540 138,450 96,420 18.000 114,420 120.500 54,eee 69,ep 121,00 15,460 S 54,00 69,000 123,000 (2,420) $ "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 3.4 pounds 0.3 hours 0.6 hours" Direct materials Direct Labor Variable manufacturing overhead Total standard cost per unit Standard Price or Rate 2.4 per pound $6.40 per hour $ 1.90 per hour Standard Cost $ 8.16 "Based on machine-hours. During June the plant produced 7000 pools and incurred the following costs: a. Purchased 28.800 pounds of materials at a cost of $2.85 per pound b. Used 23,600 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be Ignored) c Worked 2.700 direct labor-hours at a cost of $6.10 per hour d. Incurred variable manufacturing overhead cost totaling $10,350 for the month. A total of 4.500 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 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 () above by showing the net overall favorable or unfavorable variance for the month Complete this question by entering your answers in the tabs below