Problem 10-15 (Algo) Comprehensive Varlance 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: Flexible Actual Budget $ 235,000 $235, ege Sales (7,880 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) 78,540 18.000 196,549 138,460 96,428 18,000 114,420 120,589 54,00 $4,000 69,00 69.000 123,000 125,000 15,460 $ 62,420) $ *Contains direct materials direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, nas bifen 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 cost Standard Quantity or Hours 3.4 pounds 2.3 hours 8.6 hours Standard Price on Rate $ 2.48 pen pound $6.49 per hour $ 1.99 per hour Direct materials Direct labor Variable manufacturing averhead Total standard cost per unat $ 8.16 1.92 1014 $ 11.22 Based on machine-hours. During June, the plant produced 7000 pools and incurred the following costs: a. Purchased 28.800 pounds of materials at a cost of $2.85 per pound. b. Used 23.600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c Worked 2.700 direct labor-hours at a cost of $6.10 per hour d. Incurred variable manufacturing overhead cost totaling $10.350 for the month. A total of 4.500 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: Materials price and quantity variances. 2. Labor rate and efficiency variances. Variable overhead rate and efficiency variances. 2 Summarize the variances that you computed in (1) above by showing the net overal favorable or unfavorable variance for the mont- Complete this question by entering your answers in the tabs below. W Required 1 Required 2 Summarize the variances that you computed in (1) above by showing the net overal favorable or unfavorable variance for the month. (Indicate the effect of each variance by selecting for favorable for unfavorable and None for no effect ( ex zero variance). Input all amounts as positive values Net variance 4 Required 1 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 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 (ile. zero variance). Input all amounts as positive values.) Show less 12 Material price van ance Material quantity vanance 16 Labor rate variance Labor efficiency variance 10. Variable overhead rate variance Variable overhead efficiency variance Required 2 >