Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 10-15 (Algo) Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been

Problem 10-15 (Algo) Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3]

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:

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Flexible Actual Budget Sales (7,000 pools) $ 310,000 $310,000 Variable expenses: Variable cost of goods sold* 110,810 131,685 Variable selling expenses 25,000 25,000 Total variable expenses 135,810 156,685 Contribution margin 174,190 153,315 Fixed expenses: Manufacturing overhead 66,000 66,000 Selling and administrative 91,000 91,000 Total fixed expenses 157,000 157,000 Net operating income (loss) $ 17,190 $ (3,685) ' Direct materials 4 . 1 pounds $ 2 . 70 per pound $ 11 . 07 Direct labor 0.4 hours $ 8.20 per hour 3.28 Variable manufacturing overhead 0.4 hours* $ 3.70 per hour 1.48 Total standard cost per unit $ 15-83 Required 1 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 "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 F X Material quantity variance None X 1b. Labor rate variance None X Labor efficiency variance U 1c. Variable overhead rate variance U Variable overhead efficiency variance URequired 1 Required 2 Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for th: 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Excel Applications For Accounting Principles

Authors: Gaylord SmithBruce Walz

4th Edition

1133388027, 9781133388029

More Books

Students also viewed these Accounting questions