Too Cool Corporation produces portable air conditioning systems and had the following data available: Sales Less operating expenses Budget Actual $11,800,000 $11,000,000 Advertising 16,000 18,000 Less production expenses Direct Materials 5,208,000 4,636,000 Direct Labor 248,000 270,000 Variable Overhead 15,200 13,900 Rent on Equipment 6,600 6,200 Income from operations 6,306,200 6,055,900 Required: A. Prepare (i.e. complete) the performance report above; speculate and describe a possible cause for each variance (except for direct materials and direct labor) and then suggest a specific follow-up action for each. B. In order to get a better control over the amounts spent on direct materials and direct labor, the company had previously implemented the following standards and achieved the corresponding results when 6,200 units were produced: Standards Direct materials Each unit should have 105 pounds of direct materials purchased at $8 per pound. Direct labor Actual Results Actual production used 610,000 pounds of direct materials at an average cost of $7.60 per pound. Each unit should be produced in 2 1/2 hours at a direct labor cost of $16 per hour. Actual production required 18,000 direct labor hours at an average cost of $15 per hour. Calculate the price and quantity variance for direct materials and direct labor; as needed, round final calculations (i.e. each variance) to the nearest whole dollar. C. Given your results to part B above, speculate and describe a possible cause for each price and quantity variance and suggest a specific follow-up action for each.