please answer questions 1-2.
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 (4,000 pools) $210, 000 $210,000 Variable expenses: Variable cost of goods sold* 50,680 63, 710 Variable selling expenses 12, 000 12, 000 Total variable expenses 62, 680 75, 710 Contribution margin 147,320 134, 290 Fixed expenses: Manufacturing overhead 1, 000 61,000 selling and administrative 76, 000 76, 000 Total fixed expenses 137,000 137,000 Net operating income (loss) $ 10,320 $ (2, 710) "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 3.7 pounds $ 2.10 per pound $ 7.77 Direct labor 0.6 hours 6.70 per hour 4.02 Variable manufacturing overhead J.4 hours* 2.20 per hour 0. 88 Total standard cost per unit $ 12. 67 "Based on machine-hours. During June, the plant produced 4,000 pools and incurred the following costs: a. Purchased 19,800 pounds of materials at a cost of $2.55 per pound. b. Used 14,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored. c. Worked 3,000 direct labor-hours at a cost of $6.40 per hour. d. Incurred variable manufacturing overhead cost totaling $4,940 for the month. A total of 1,900 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. 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. Required 1 Required 2 la. 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 "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Show less * 1a. Material price variance Material quantity variance 1b. Labor rate variance Labor efficiency variance 1c. Variable overhead rate variance Variable overhead efficiency variance Required 1 Required 2 >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 "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Net variance
