Whirlwind Inc. producesoutdoor activity structures including blow-up bouncing structures and trampolines.One of the product lines - a small trampoline for toddlers - is manufactured at the company's Dakotafacility. The standard cost for one trampolineis as follows:

Standard Quantity or Hours Standard Price orRate StandardCost

Direct materials 1.20kilograms $4.00per kilogram $4.80

Direct labour 0.80hours $6.00per hour 4.80

Variable manufacturing overhead 0.40machine-hours $4.00per machine-hour 1.60

Total standard cost $11.20

The Dakota facilityhas been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,200 trampolines; the normal volume is 15,350 trampolinesper month. Fixed costs are allocated using machine-hours.

Flexible Budgeted Actual

Sales (15,200 trampolines) $456,000 $456,000

Less: Variable expenses:

Variable cost of goods sold* 170,240 195,002

Variable selling expenses 20,300 20,300

Total variable expenses 190,540 215,302

Contribution margin 265,460 240,698

Less: Fixed expenses:

Manufacturing overhead 132,000 132,000

Selling and administrative 85,120 85,120

Total fixed expenses 217,120 217,120

Net income $48,340 $23,578

*Contains direct materials, direct labour, and variable manufacturing overhead.

Peter Summer, the general manager of the Dakota facility, wants to get things under control. He needs information about the operations in June since the income statement signalled that the problem could be due to the variable cost of goods sold. Summerlearns the following about operations and costs in June:

1. 30,700 kilograms of materials were purchased at a cost of $3.70 per kilogram.
2. 24,600 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.)
3. 11,600 direct labour-hours were worked at a cost of $7 per hour.
4. Variable manufacturing overhead cost totalling $24,612 for the month was incurred. A total of 5,860 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.Direct materials price and quantity variances.(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

materials price variances:

materials quantity variances:

b. Direct labour rate and efficiency variances.(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

labour rate variances:

labour efficiency variances:

c.Variable overhead spending and efficiency variances.(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

Variable overhead spending variances?

Variable overhead efficiency variances.?

2-a.Summarize the variances you computed in part (1) by showing the net overall favourable or unfavourable variance for the month.(Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

Net Variance:

2-b. What impact did this figure have on the company's income statement?

This will cause the cost of goods sold ------- thereby-------- net income by that amount

note: the places with (-----) are blank spaces needed to be filled