write the solution and answer the questions in 2 paragraphs

PROBLEM 10-15 Comprehensive Variance Analysis LO10-10, L010-20, LO10-30 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 Budget $675,000 Actual $675,000 Sales (15,000 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) 435,000 20,000 455,000 220,000 461,890 20,000 481,890 193,110 130.000 84,000 214,000 $ 6,000 130,000 84,000 214,000 $ (20,890) Contains direct materials, direct labor, and variable 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 lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per hour Standard Cost $15.00 12.80 1.20 $29.00 Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound, 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. Contains direct materials, direct labor, and variable 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 lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per hour Standard Cost $15.00 12.80 1.20 $29.00 Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound. 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 variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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. 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. What impact did this figure have on the company's income statement? Show computations. 3. Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances. PROBLEM 10-15 Comprehensive Variance Analysis L010-10.1010-2 .1010-3 Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution firma income statement below ecole Budget $675.000 Actual $675,000 461890 Sales (15.000 pools arable expenses Vanable cost of goods sold Variable selling expe Total variable expen Corbin Fed expenses Manufacturing overhead Selling and administrative Total expenses Net operating income fossy 435.000 20.000 255.000 220,000 20.000 190 130 000 130.000 84.000 214,000 $6,000 $ 0019 Contains direct materials, direct labor and Varsatile antering overed Janet Dunn, who has just been appointed general manager of the Westwood Plant has been given in this wonder control." Upon reviewing the plant's income statement Ms Dunhas concluded that the major problem lies in the variable Pare 479 cou of goods told She has been provided with the following standard com per Winming pool Standard Outty Sandal Pride Standard or Hours or Rate I can Direct teaks 3.0 pounds $5.00 per pound 315.00 Deco 0.8 hours $16.00 per hour 12.30 Variable lecturing overhead 0410 Toasted cost per unit $28.00 Arnod on machine hours. During June the plant produced 15.000 pools and incurred the following Purchased 60,000 pounds of materials at a cost of $4.95 per pound Used 19.200 pounds of materials in production (Fished 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. Net operating income foss) $ 6.000 $ 120,890 Contains direct materials drect labot, and varble manufacturing overhod. 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 plants income statement Ms. Dunn has concluded that the major problem lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct materials Director Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per how Standard Cost $15.00 12.80 120 59900 Based on machine hours During June the plant produced 15.000 pools and incurred the following costs pificant and can be proved) a. Purchased 60.000 pounds of a cost of 54.95 per pound. 1. Used 19.200 pounds of materials in production. Hished goods and work in process o s e c. Worked 11.00 direct laber-hours a cost of $17.00 per hour 4. Incurred variable manufacturing overhead cooling $18.290 for the month. A total of 200 c It is the company policy to close to cost of goods sold am b w recorded Required 1. Compare the following inces for June Meral price races Labore and enciency races Variable overhead rate and enciency variances 2. Summa therances that you computed to twowe by showing the on e w h o 3. Pick out the two mo c variances that you compuedin () above, plain to Ms D i es of these variances PROBLEM 10-15 Comprehensive Variance Analysis LO10-10, L010-20, LO10-30 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 Budget $675,000 Actual $675,000 Sales (15,000 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) 435,000 20,000 455,000 220,000 461,890 20,000 481,890 193,110 130.000 84,000 214,000 $ 6,000 130,000 84,000 214,000 $ (20,890) Contains direct materials, direct labor, and variable 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 lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per hour Standard Cost $15.00 12.80 1.20 $29.00 Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound, 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. Contains direct materials, direct labor, and variable 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 lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per hour Standard Cost $15.00 12.80 1.20 $29.00 Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound. 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 variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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. 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. What impact did this figure have on the company's income statement? Show computations. 3. Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances. PROBLEM 10-15 Comprehensive Variance Analysis L010-10.1010-2 .1010-3 Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution firma income statement below ecole Budget $675.000 Actual $675,000 461890 Sales (15.000 pools arable expenses Vanable cost of goods sold Variable selling expe Total variable expen Corbin Fed expenses Manufacturing overhead Selling and administrative Total expenses Net operating income fossy 435.000 20.000 255.000 220,000 20.000 190 130 000 130.000 84.000 214,000 $6,000 $ 0019 Contains direct materials, direct labor and Varsatile antering overed Janet Dunn, who has just been appointed general manager of the Westwood Plant has been given in this wonder control." Upon reviewing the plant's income statement Ms Dunhas concluded that the major problem lies in the variable Pare 479 cou of goods told She has been provided with the following standard com per Winming pool Standard Outty Sandal Pride Standard or Hours or Rate I can Direct teaks 3.0 pounds $5.00 per pound 315.00 Deco 0.8 hours $16.00 per hour 12.30 Variable lecturing overhead 0410 Toasted cost per unit $28.00 Arnod on machine hours. During June the plant produced 15.000 pools and incurred the following Purchased 60,000 pounds of materials at a cost of $4.95 per pound Used 19.200 pounds of materials in production (Fished 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. Net operating income foss) $ 6.000 $ 120,890 Contains direct materials drect labot, and varble manufacturing overhod. 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 plants income statement Ms. Dunn has concluded that the major problem lies in the variable Page 479 cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct materials Director Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 3.0 pounds 0.8 hours 0.4 hours Standard Price or Rate $5.00 per pound $16.00 per hour $3.00 per how Standard Cost $15.00 12.80 120 59900 Based on machine hours During June the plant produced 15.000 pools and incurred the following costs pificant and can be proved) a. Purchased 60.000 pounds of a cost of 54.95 per pound. 1. Used 19.200 pounds of materials in production. Hished goods and work in process o s e c. Worked 11.00 direct laber-hours a cost of $17.00 per hour 4. Incurred variable manufacturing overhead cooling $18.290 for the month. A total of 200 c It is the company policy to close to cost of goods sold am b w recorded Required 1. Compare the following inces for June Meral price races Labore and enciency races Variable overhead rate and enciency variances 2. Summa therances that you computed to twowe by showing the on e w h o 3. Pick out the two mo c variances that you compuedin () above, plain to Ms D i es of these variances