Variance Analsis (25 points) Henry Hawkins Industries (HHI) manufactures a plastic swimming pool at its Batavia plant. The plant has been experiencing problems as shown by its October contribution format income statement below Budgeted Actual Sales (15,000 pools) Variable expenses: $675,000 $675,000 Cost of goods sold 435.00020,000 Selling expenses Total variable expenses Contribution margin Fixed expenses 20,000461,890 220,000 193,110 Manufacturing overhead Selling and administration 130,000 84,000 130,000 84,000 Total fixed expenses Net operating income (loss) $6,000 $20,890) Contains direct materials, direct labor, and variable manufacturing overhead As you can imagine, the general manager was a litle shocked to see the loss for the month, particularly because sales were exactly as budgeted. HHI uses a standard cost system. Here are the standards for one swimming pool: Standard Quantity or Hours Standard Price or Rate Direct materials Direct labor Variable manufacturing overhead 3.0 pounds $5.00 per pound $16.00 per hour $3.00 per hour 0.8 hours 0.4 hours (based on machine-hours) During October, the plant produced 15,000 pools and incurred the following costs: Purchased 60,000 pounds of materials at a cost of $4.95 per pound. There was no raw a. materials in inventory at the beginning of the month. b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 11,800 direct labor-hours at a cost of $17.00 per hour d. Incurred a total variable manufacturing cost of $18,290 for the month. A total of 5,900 machine-hours was recorded. Required: 1. Compute the following variances for October Direct materials price and quantity variances AGE IS I7