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 BudgetActual

Sales (4,000 pools)$ 180,000$ 180,000

Variable expenses:

Variable cost of goods sold*37,72049,210

Variable selling expenses15,00015,000

Total variable expenses52,72064,210

Contribution margin127,280115,790

Fixed expenses:

Manufacturing overhead51,00051,000

Selling and administrative66,00066,000

Total fixed expenses117,000117,000

Net operating income (loss)$ 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 plants 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 HoursStandard Price or RateStandard Cost

Direct materials3.1pounds$ 2.10per pound$ 6.51

Direct labor0.4hours$ 6.10per hour2.44

Variable manufacturing overhead0.3hours*$ 1.60per hour0.48

Total standard cost per unit $ 9.43

*Based on machine-hours.

During June, the plant produced 4,000 pools and incurred the following costs:

Purchased 17,400 pounds of materials at a cost of $2.55 per pound.

Used 12,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

Worked 2,200 direct labor-hours at a cost of $5.80 per hour.

Incurred variable manufacturing overhead cost totaling $3,000 for the month. A total of 1,500 machine-hours was recorded.

It is the companys 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.

7 Miller Toy Company manufactures a plastic swimming pools Westwood Part. The plant has been experiencing problems as shown by its June contribution format income statement below Prim Medte Sales (4,800 2015) Actual Variable expenses 5110 Variable cost of goods solo 32,720 Variable seine expenses 49,210 Total variable expenses 15. Contribution in 10 Fixed expenses Manufacturing overhead 51,00 51,000 Selling and thinistrative 66,00 1.000 Total Fixed expenses 12 Metering income (oss) $10,20 01231 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 plants income statement Ms Dunn has concluded that the major problemles in the variable cost of goods sold. She has been provided with the following standard cost per imming pool Standard Quantity or sta Stand Priorate Cat 3.1 pounds 51.1 pound 1. Direct materiais 3.4 hours 161 bour 2.4 Direct IF . 0.3 hours SL per hour variable manufacturing overhead S. Total standard cost per unit fronte *Based on machine hours During June, the plant produced 4.000 pools and incurred the following costs cost of 52 55 per pound pontorescand can be 2.44 Direct labor Variable manufacturing overhead Total standard cost per unit 0.4 hours 0.3 hours 5 6.10 per hour 5 1.60 per hour $9.43 10 points *Based on machine-hours Book P 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 above by showing the net overall favorable or unfavorable variance for them Rutorences Complete this question by entering your answers in the tabs below. Required 1 Required 2 1a. Compute the following variances for June, materiais price and quantity variances the following variances for Jane, labor rate and efficiency variances fer une variable overhead rate and efficiency variance the test of each vallace by selecting for favor TS Required: 1. Compute the following variances for June a. Materials price and quantity variances b. Labor rate and efficiency variances Variable overhead rote and efficiency variances 2. Summarize the variances that you computed in th above by showing the net overall favorable or unfavorable variance for the month eBook Print Complete this question by entering your answers in the tabs below. References Required: Required 2 1a. Compute the following variances for June, materials price and quantity variances 1b. Compute the following variances for June, labor rate and efficiency variances 1c. Compute the following variances for June, variable overhead rate and efficiency variances (Do not round your intermediate calculations. Indicate the effect of each variance by selecting for favorable for unfavorable, and None" for no effectie, zero variance). Input all amounts as positive values.) 1a Material price variance 1a. Material quantity variance 1b Laborrate variance to Labor efficiency variance 1. Variable overhead tate variance 1 Variable deficiency variance Required 2) ces 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 ariances 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the monn Complete this question by entering your answers in the tabs below. Required 1 Required 2 Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. (Indicate the effect of each variance by selecting " for favorable. V for unfavorable, and one for effect zero variance). Input all amounts as positive values.) Net varance