please answer all questions

Questions: 1. What is a flexible budget and how does it differ from a static planning budget? 2. Why is it difficult to interpret a difference between how much expense was budgeted at the beginning of the period and how much was actually spent? 3. What does a flexible budget enable that a simple comparison of the planning budget to actual results does not do? 4. What are separate price and quantity variances computed? 5. If the materials price variance is favorable but they materials quantity variance is unfavorable, what might this indicate? 6. What effect, if any would you expect poor quality materials to have on direct labor variances? Problem: 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 (15,000 pools) $ 675,000 S 675,0 00 Variable expenses Variable cost of goods sold 435.000 461.8 90 Variable selling expenses 20,000 20.00 0 Total variable expenses 455,000 481,8 90 Contribution margin 220.000 193.1 10 Fixed expenses Manufacturing overhead 130.000 130,0 00 Selling and administrative 84.000 84.00 0 Total fixed expenses 214.000 2140 00 Net operating income doss) 6.000 520.89 Contains direct materials, direct labor, and variable manufacturing overhead 15 *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 Standard Price or Rate Standard Cost Direct materials 3.0 pounds $ 5.00 per pound $ 15.00 Direct labor 0.8 hours $ 16.0 per 0 hour 12.80 Variable manufacturing overhead 0.4 hours $ 3.00 per hour 1.20 Total standard cost per unit s 29.00 "Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound, b. Used 49,200 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be ignored.) C. Worked 11,800 direct labor-hours at a cost of $17.00 per hour. d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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 b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) C. Worked 11,800 direct labor-hours at a cost of $17.00 per hour. d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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. I 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. What impact did this figure have on the company's income statement? Show computations 3. Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances