Problem 10-15 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: Flexible Actual Budget $240,000 $240,000 Sales (6,000 pools) Variable ex Variable cost of goods 57,900 74,210 sold Variable selling 18,000 18,000 expenses Total variable expenses 75,900 92,210 Contribution margin Fixed expenses Manufacturing overhead Selling and administrative Total fixed expenses 164,100 147,790 66,000 66,000 84,000 84,000 150,000 150,000 Net operating income (loss) 14,100 (2,210) Contains direct materlals, direct labor, and varlable 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 es in the variable cost of goods sold. She has been provided with the following standard cost per swimming poot Standard Standard Price Standard Quantity or Rate Cost or Hours 3.4 $2.00 Per pound Direct materials s 6.80 pounds 0.3 hours $7.50 per hour 0.2 hours Direct labor 2.25 Variable manufacturing overhead 0.60 $3.00 per hour Total standard cost per unit $ 9.65 "Based on machine-hours. During June, the plant produced 6,000 pools and incurred the following costs: a. Purchased 25,400 pounds of materials at a cost of $2.45 per pound b. Used 20,200 pounds of materlals in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 2,400 direct labor-hours at a cost of $7.20 per hour d. Incurred variable manufacturing overhead cost totaling $5,100 for the month. A total of 1,500 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: a. Materlals price and quantity varlances b. Labor rate and efficlency varlances C. Variable overhead rate and efficlency variances. 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month