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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

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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 Actual Budget $ 225,eee $ 225,000 Sales (6,eee 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 Net operating income (loss) 73,620 17. de 90,620 134,360 88,700 17, ea 105,700 119,300 - 53, see 53, 68,000 68,000 121,000 121,000 $ 13,380 $ (1,780) "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 Standard Price Standard Hours or Rate Cost Direct materials 3.3 pounds $ 2.30 per pound $ 7.59 Direct labor 0.6 hours $ 6.30 per hour Variable manufacturing overhead 0.5 hours $ 1.80 per hour Total standard cost per unit $ 12.27 3.78 0.90 "Based on machine hours. During June, the plant produced 6,000 pools and incurred the following costs: 3. Purchased 24,800 pounds of materials at a cost of $275 per pound. b. Used 19,600 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be Ignored.) c. Worked 4.200 direct labor-hours at a cost of $6.00 per hour d. Incurred variable manufacturing overhead cost totaling $7,260 for the month. A total of 3,300 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 (1) above by showing the net overall favorable or unfavorable variance for the month Complete this question by entering your answers in the tabs below

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