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
Sales (7,000 pools)	$	255,000		$	255,000
Variable expenses:
Variable cost of goods sold*		85,400			104,590
Variable selling expenses		15,000			15,000
Total variable expenses		100,400			119,590
Contribution margin		154,600			135,410
Fixed expenses:
Manufacturing overhead		64,000			64,000
Selling and administrative		79,000			79,000
Total fixed expenses		143,000			143,000
Net operating income (loss)	$	11,600		$	(7,590	)

*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 Hours	Standard Price or Rate			Standard Cost
Direct materials	4.0 pounds	$	2.40	per pound	$	9.60
Direct labor	0.3 hours	$	7.00	per hour		2.10
Variable manufacturing overhead	0.2 hours*	$	2.50	per hour		0.50
Total standard cost per unit					$	12.20

*Based on machine-hours.

During June, the plant produced 7,000 pools and incurred the following costs:

1. Purchased 33,000 pounds of materials at a cost of $2.85 per pound.

2. Used 27,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 2,700 direct labor-hours at a cost of $6.70 per hour.

4. Incurred variable manufacturing overhead cost totaling $4,930 for the month. A total of 1,700 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.

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1a.	Material price variance
	Material quantity variance
1b.	Labor rate variance
	Labor efficiency variance
1c.	Variable overhead rate variance
	Variable overhead efficiency variance

2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.

Net variance

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Total budgeted fixed overhead cost for the year	$	545,100
Actual fixed overhead cost for the year	$	537,000
Budgeted direct labor-hours (denominator level of activity)		69,000
Actual direct labor-hours		70,000
Standard direct labor-hours allowed for the actual output		67,000

Required:

1. Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead rate to 2 decimal places.)

2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

1.	Fixed portion of the predetermined overhead rate		per DLH
2.	Budget variance
	Volume variance